Unemployment claims fell dramatically last week, despite the violent winter storms that swept through Texas and other parts of the South, the Department of Labor reported on Thursday.
First-time claims for unemployment insurance totaled 730,000 in the week ending February 20, well below the Dow Jones estimate of 845,000.
That total represented a substantial decrease of 841,000 in the previous week, a number that has been revised to less than 20,000.
Despite the decline, the total, the lowest since November 28, was still well above anything the US labor market had seen before the Covid-19 pandemic.
Continued claims have also fallen, dropping 101,000 to 4.42 million, the lowest since March 21, 2020, but also still far above anything the labor market had seen before the pandemic.
The drop probably did not take into account those who should be registered due to storms.
“The sharp drop in unemployment insurance claims is probably due to the fact that people in the states hardest hit by last week’s big storm, especially in Texas, have better things to do than apply for unemployment insurance,” wrote Ian Shepherdson, chief economist at Pantheon Macroeconomics. “We expect a recovery next week. The trend seems to be almost stable, but we continue with the view that claims will soon start to fall, slowly at first, but then more quickly as the economy reopens in April and May. . “
Other economic reports on Thursday morning showed that spending on long-lived goods increased 3.4% in the headline and 1.4% excluding transportation, both well above Wall Street estimates.
In addition, the second reading of gross domestic product in the fourth quarter of 2020 showed an increase of 4.1%, one tenth of a percentage point above the initial reading, but slightly below the 4.2% estimate of the Dow Jones.
The drop in the number of requests for unemployment benefits, headlines, masked the continued pressure on the labor market.
Although the overall number has dropped, the number of people enrolled in pandemic-related programs has continued to increase, with just over 1 million more applications in the pandemic emergency program, which compensates those whose regular benefits have ended.
In all, there were just over 19 million Americans receiving some compensation on February 6, an increase of more than 700,000 over the previous week.
More recent data shows, however, that complaints are increasing in the Pandemic Unemployment Assistance Program, which offers benefits to those who would not normally be eligible. In the weeks of February 13 and 20, more than 964,000 Americans signed up for the program.
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