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 861,000 during prior week

  • Continuing claims, week ended February 13: 4.419 million vs. 4.460 million expected and 4.494 million during prior week

Initial unemployment claims fell the 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.

"Jobless claims are the one data series that has been trending in the wrong direction of late," Deutsche Bank economist Brett Ryan wrote in a note. "Weather-related issues may keep initial claims elevated for another week or two before we finally see a resumption of the downtrend."

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 18.3 million Americans were still claiming benefits across all programs as of Jan. 30. That included more than 11.7 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 add up to 24 weeks of benefits.

Given the elevated metrics still present across the report and last 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.

"The latest weekly jobless claims data suggests the labor market remains in a soft patch following weak NFP [non-farm payrolls] reports for both December and January," Nomura chief economist Lewis Alexander wrote in a recent note. "While fiscal stimulus and declining new COVID-19 cases should support activity in the spring, we see mounting downside risk for the February employment report."