Claims for the unemployed fell sharply last week, despite the brutal winter storms that swept through Texas and other parts of the south, the Labor Department said on Thursday.
The first unemployment insurance deposits totaled 730,000 for the week ending February 20, well below the Dow Jones estimate of 845,000.
This total represented a substantial decrease compared to 841,000 in the previous week, a number that was revised lower by 20,000.
Despite the decline, the total, the lowest since November 28, was still far above what the US labor market saw before the Covid-19 pandemic.
Ongoing demand also fell by 101,000 to 4.42 million, the lowest since March 21, 2020, but also well above anything seen by the labor market before the pandemic.
The decline probably did not take into account those expected to file due to storms.
“The sharp drop in unemployment claims is probably due to people in the states hardest hit by last week’s huge storm, especially Texas, having better things to do than apply for unemployment,” wrote Ian Shepherdson, chief economist at Pantheon. Macroeconomics. “We expect a comeback next week. The trend appears to be roughly flat, but we remain confident that claims will soon begin to decline, slowly at first, but then faster, as the economic reopening accelerates in April and May.”
Other economic reports on Thursday morning showed that spending on long-term goods increased by 3.4% per title and by 1.4% excluding transportation, both well above Wall Street estimates.
Also, the second reading of gross domestic product in the fourth quarter of 2020 showed an increase of 4.1%, an increase of one tenth of a percentage point compared to the initial reading, but slightly below the Dow Jones estimate of 4 ,2%.
The decrease in the main number of unemployed applications masked the continuous pressures on the labor market.
Although the total number has decreased, the lists of those submitting pandemic-related programs have continued to grow, with just over 1 million additional applications under the pandemic emergency program, which compensates for those whose regular benefits have been exhausted.
In all, there were just over 19 million Americans who received some compensation as of Feb. 6, an increase of more than 700,000 from the previous week.
More recent data show, however, that demand is growing under the Pandemic Unemployment Assistance Program, which provides benefits to those who would not normally be eligible. In the weeks of February 13 and 20, more than 964,000 Americans applied to the program.
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