Unemployment insurance claims for the first time fell unexpectedly sharply last week amid signs that hiring has risen in the U.S. economy, the Labor Department said Thursday.
Claims amounted to 684,000 for the week ended March 20, the first time the number has been below 700,000 during the Covid-19 era. The level was a substantial drop from 781,000 a week ago and was the lowest since March 14, 2020, just when the pandemic had begun.
Economists surveyed by Dow Jones expected claims to rise to 735,000 people after an unexpected rise the previous week.
A separate release on Thursday morning showed gross domestic product was stronger than expected in the fourth quarter. The third and final reading of GDP showed an increase of 4.3%, compared to previous estimates and the Wall Street consensus of 4.1%.
Policymakers have been looking at job data more closely, however, to find clues as to where the economy is heading.
Advances last week showed that the labor market is gaining momentum amid aggressive government stimulus and a vaccination program that allows to see about 2.5 million Americans a day receiving shots aimed at stopping the spread of Covid -19.
The most recent weekly total of claims also marks the first time the total is below the pre-pandemic record of 695,000 affected in early October 1982.
In addition to the fall in weekly claims, continued claims, which remain a week behind, fell to 3.87 million, a figure of 264,000.
The total number of beneficiaries increased to almost 19 million, although these data are two weeks behind the claims figures. A steady decline in pandemic-era special program attendance is likely to reduce the total in the coming weeks.
Wall Street continued to indicate a lower opening despite news of better-than-expected jobs.
While, in general, claims figures remain high by historical standards, the employment situation is noticeably better than a year ago.
For the week ended March 21, 2020, claims amounted to 3.3 million and would explode to nearly 6.9 million a week later as companies laid off workers amid a burst of orderly strikes by the government across the country.
Weekly claims would not fall below 1 million by the end of August and 22.4 million workers would lose their jobs in March and April alone. About 13 million of these jobs have since been recovered.
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