Weekly jobless claims dip slightly after major upward revision

The number of new applications for unemployment insurance filed last week dipped slightly but remained well above historic averages, according to data released Thursday by the Labor Department.

Weekly jobless claims totaled 793,000 during the first week of February, falling by 19,000 from the previous week’s revised total of 812,000 claims. The total number of weekly jobless claims filed in the final week of January was initially reported at 779,000, 33,500 fewer than the revised total.

The small decline in last week’s claims and the major upward revision of the previous week’s total are the latest signs of how deeply the coronavirus pandemic has damaged the U.S. labor market.

The U.S. added just 49,000 jobs in January as the unemployment rate declined to 6.3 percent. 

While the jobless rate has fallen substantially since rising to 14.7 percent in April, the dramatic decline in labor force participation rate has made unemployment appear artificially low.

Federal Reserve Chairman Jerome Powell said Wednesday that the unemployment rate would be close to 10 percent if it included workers who have stopped seeking work because of the pandemic.

Powell added that the U.S. labor market cannot return to its historic pre-pandemic strength without further support from both the Fed and fiscal stimulus.

“Experience tells us that getting to and staying at full employment will not be easy. In the near term, policies that bring the pandemic to an end as soon as possible are paramount,” Powell said.

President Biden and congressional Democrats are advancing a $1.9 trillion coronavirus response and economic aid bill and are aiming to enact the measure by the first week of March.

The bill would expand and extend employment benefits through the end of August, send another round of direct payments to U.S. households and provide more support for small businesses and state and local governments.