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Data released on Thursday showed Initial and Continuing Jobless Claims dropped more than expected compared to last week. With renewed pressure on businesses as coronavirus cases rise, it is unclear if the near-term trend will remain downward, warn analysts at Wells Fargo. 

Key Quotes: 

“After seasonally adjusting for the holiday week, initial claims fell 75K to 712K. That followed two weeks of increases, and pushed the four-week average of claims to its lowest level since COVID.”

“The downward trend continues to slow, however, pointing to smaller job gains ahead. Through Nov. 14, more than 20M individuals were receiving benefits, with 13.4M on programs expiring at the end of the year.”

“Claims remain elevated relative to other measures of layoffs, suggesting some catch up is due as these issues are worked through. But that might limit the signal strength as rising COVID cases renew pressure on businesses.”