WASHINGTON: Fewer Americans filed new claims for unemployment benefits last week amid falling COVID-19 infections, but the near-term outlook for the labor market is unclear after winter storms wreaked havoc in the South region in the middle of this month.
"The data underscore the big boost to growth already evident from last December's stimulus," said Chris Low, chief economist at FHN Financial in New York."Momentum on the next stimulus bill may be too powerful to stop ... some of the spending is needed despite the economy's strength." "We would not be surprised to see a rise in claims next week as a result of the weather-related backup, but expect claims to begin trending lower more definitively over the course of March," said Sarah House, a senior economist at Wells Fargo Securities in Charlotte, North Carolina.
At least 5.066 million people were on extended benefits during the week ended Feb. 6, an increase of 1.0 million from the prior period. These benefits, which are funded by the government, will expire in mid-March if Congress does not pass the Biden administration's relief package. The improving public health situation helped to boost retail sales in January. Households perceptions of the labor market also improved in February, setting the wheels in motion for stronger economic growth this quarter.