US weekly unemployment drops to 730,000

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FILE – In this Feb. 9, 2021 file photo, a passer-by walks past an employment hiring sign while entering a Target store location, in Westwood, Mass. The Federal Reserve says there’s evidence that hiring has picked up in recent weeks, though the job market remains badly damaged by the pandemic. In its semi-annual monetary policy report released Friday, Feb. 19, the Fed says job data compiled by payroll processor ADP indicate that employment improved modestly through early February. (AP Photo/Steven Senne, File)

CHICAGO (NewsNation Now) — The number of Americans filing first-time applications for jobless benefits dropped last week to 730,000 with more potential economic reprieve on the way as lawmakers weigh President Joe Biden’s proposed $1.9 trillion COVID-19 relief bill.

The U.S. Labor Department released its latest figures Thursday, showing that last week’s unemployment claims dropped 111,000 from the previous week’s revised level.

Claims have been out of sync with an improvement in overall economic conditions as the winter coronavirus wave recedes and $900 billion in additional pandemic relief money provided by the government at the end of December flows through the economy.

The number of Americans receiving traditional unemployment benefits also decreased to 4.4 million, a decline of 101,000. 

Though overall claims have dropped from a record 6.867 million last March when the pandemic hit the United States, they remain above their 665,000 peak during the 2007 to 2009 Great Recession.

In the coming week, claims could be boosted by the stormy weather in the South, which left large parts of Texas in the dark and without water for days. The icy weather also caused a significant backlog of millions of vaccine doses, slowing the pace of vaccinations nationwide.

However as damaging as the ice storms and widespread power outages in Texas were to residents and businesses there, they’re unlikely to inflict a major blow on the overall U.S. economy, according to Oxford Economics.

Oren Klachkin, lead U.S. economist at Oxford, estimates that the harsh winter weather will slightly lower growth in the January-March quarter to a still-blistering 6.8% annual rate, down from a previous estimate of 7.1%.

However economists remain optimistic that the economy will recover with a sharp rebound in retail sales and the push for Biden’s $1.9 trillion recovery package.

“The economy should get a substantial lift if a good part or all of the $1.9 trillion stimulus package favored by President Biden becomes law, with House passage seen imminent, said Mark Hamrick, senior economic analyst at Bankrate. “With 10 million Americans still listed as officially unemployed as of the latest monthly snapshot, and many more either under underemployed, or not in the labor force but still want a job, it will be many months before all of that ground is made up.”

The House of Representatives could pass the virus aid bill as soon as Friday. The Senate is likely to follow up in early March. 

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