Jobless claims took a bit of a dip last week as businesses kept their hiring plans on hold amid the pandemic, while fourth-quarter growth in the U.S. rang in at a much more subdued pace.
The Labor Department reported Thursday that 847,000 Americans filed for first-time jobless benefits in the week ended Jan. 23 vs. an upwardly revised 914,000 claims the week before. Economists polled by FactSet had expected claims of 888,000.
Separately, the Commerce Department reported Thursday that economic growth in the fourth quarter came in at an initial 4%. Economists polled by FactSet had been expecting growth of 4.2% after a skewed third-quarter reading of 33.4%.
For 2020 as a whole, the U.S. economy declined by 3.5% - its worst showing since 1946.
Even with the lackluster economic numbers, economists and market-watchers are optimistic that things will turn around. Washington's recently approved stimulus package, which is hoped to spark another round of hirings, is widely expected to be augmented by another $1.9 trillion economic package put forward by President Joe Biden.
The Federal Reserve on Wednesday held its benchmark fed funds rate near zero, maintained its bond-buying program at the current pace, and said it saw signs that an economic recovery "has moderated in recent months."
“The pace of the recovery in economic activity and employment has moderated in recent months, with weakness concentrated in the sectors most adversely affected by the pandemic,” the central bank said in a statement following its first meeting of 2021.
The Fed committed to maintaining its bond-buying program at $120 billion a month until it witnessed “substantial further progress” in employment and on its inflation goals.
"The economy is a long way from our employment and inflation goals," Powell said at a news conference on Wednesday, "and it is likely to take some time for substantial further progress to be achieved."