Slight drop in weekly unemployment claims filed nationally, but labor markets remain far from healthy.

The U.S. Department of Labor reports a small dip in UI claims filed in the most recent week. 

In the week ending February 6, the advance figure for seasonally adjusted initial claims was 793,000, a decrease of 19,000 from the previous week’s revised level. The previous week’s level was revised up by 33,000 from 779,000 to 812,000. The 4-week moving average was 823,000, a decrease of 33,500 from the previous week’s revised average. The previous week’s average was revised up by 8,250 from 848,250 to 856,500.

The advance seasonally adjusted insured unemployment rate was 3.2 percent for the week ending January 30, a decrease of 0.1 percentage point from the previous week’s revised rate. The previous week’s rate was revised up by 0.1 from 3.2 to 3.3 percent.

Recall Federal Reserve chair Jerome Powell’s observation earlier this week that the real unemployment rate last month was closer to 10%.

The Associated Press reports on the implications for national policy.

The job market’s persistent weakness is fueling President Joe Biden’s push for a $1.9 trillion economic rescue package. Biden’s proposal would extend, through August, two federal unemployment benefit programs that are set to expire in mid-March. His proposal would also raise the federal unemployment benefit to $400 a week from the current $300.

Some economists, including former Treasury Secretary Larry Summers, have raised concerns that such a huge spending package would risk igniting inflation by fueling a burst of consumer spending later this year as the virus is gradually brought under control.

Yet on Wednesday, Federal Reserve Chair Jerome Powell underscored the Fed’s focus on the struggling job market and said he thought that any worrisome surge in inflation would be unlikely. If it did arise, Powell said, the Fed has the financial tools it needs to quell inflation. For now, inflation remains below the Fed’s target rate.

“We are still very far from a strong labor market whose benefits are broadly shared,” Powell said.

A driving force behind the Biden administration’s push for more aid is the impending expiration of the extended jobless benefits in barely more than a month.

The pandemic still controls the recovery.