Weekly unemployment claims fell far more than expected last week, as the labor market recovery took a stride forward even as harsh winter weather compounded with the coronavirus pandemic over the past several weeks.
The Department of Labor released its weekly report on new jobless claims Thursday at 8:30 a.m. ET. Here were the main metrics from the report, compared to consensus data compiled by Bloomberg:
Initial jobless claims, week ended February 20: 730,000 vs. 825,000 expected and revised 841,000 during prior week
Continuing claims, week ended February 13: 4.419 million vs. 4.460 million expected and revised 4.520 million during prior week
Initial unemployment claims fell first time in five weeks for the period ending Feb. 20, and broke below 800,000 for the first time in seven weeks. But even the bigger than expected drop left claims well above their pre-pandemic levels, when claims were coming in at an average of just over 200,000 per week.
The decline last week did bring down the four-week moving average for new claims, however. This fell to 807,750, for a decrease of 20,500 from the prior week.
"Claims plunged last week to the lowest level since November. The sharp decline likely reflects the impact of weather-related disruptions," High Frequency Economics economist Rubeela Farooqi wrote in an email Thursday morning. "Overall, layoffs are continuing at an elevated level and an extraordinarily high number of people remain on government support. Job growth will improve gradually and will benefit from virus-related restrictions being lifted. However, a stronger recovery will be delayed until the economy can reopen more fully."
The vast majority of U.S. states reported decreases in new claims last week, helping contribute to the overall improvement. California posted by far the largest drop of 50,000 new claims on an unadjusted basis, followed by Ohio with a drop of 46,000 new claims. These more than offset notable increases in new claims in states including Illinois at 12,500, and Missouri at 4,200.
Continuing jobless claims, which are reported on a one-week lag and measure the total number of individuals still receiving regular state unemployment benefits, have fallen for the past six consecutive weeks. However, these also remain more than double their pre-pandemic levels, even as more and more Americans have exhausted their six months of continuing state benefits and rolled onto longer-term federal unemployment programs.
Some 19 million Americans were still claiming benefits across all programs as of February 6, the latest date for which data is available. That included more than 12.5 million Americans on Pandemic Unemployment Assistance — the federal program offering benefits to gig workers and the self-employed who do not qualify for other programs — and Pandemic Emergency Unemployment Compensation, which offers additional up to 24 weeks of benefits.
Given the elevated metrics still present across the report and the previous week's unexpected sharp jump in new claims, returning back to pre-pandemic levels of joblessness likely remains a ways off. And since the latest spike in new claims came mid-month, or around the time of the Labor Department's monthly jobs report survey period, that labor market weakness will likely be reflected in at least one more jobs report.
Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck
Read more from Emily: