Initial claims for unemployment insurance fell unexpectedly sharply last week amid signs that the number of people in the US economy has picked up, the Labor Department reported Thursday.
The total number of claims was 684,000 for the week ending March 20, the first time the number fell below 700,000 during the Covid-19 era. The level was a significant drop from the 781,000 a week ago and was the lowest since March 14, 2020, just when the pandemic started.
Economists polled by Dow Jones expected a total of 735,000 claims.
A separate publication Thursday morning showed that the gross domestic product was stronger than expected in the fourth quarter. The third and final reading of GDP showed a gain of 4.3%, higher than previous estimates and the Wall Street consensus of 4.1%.
However, policymakers have been watching the job data more closely for clues as to where the economy is headed.
Last week’s progress showed that the job market is gaining momentum amid aggressive government incentives and a vaccination program that involves nearly 2.5 million Americans receiving injections a day to stop the spread of Covid-19.
The most recent weekly claims total also marks the first time the total falls below the pre-pandemic record of 695,000 hits in early October 1982.
In addition to the decline in weekly claims, persistent claims, which are a week behind, fell to 3.87 million, down from 264,000.
The total of those receiving benefits has risen to nearly 19 million, although that data is two weeks behind claims numbers. A continued decline in the number of people receiving aid under special pandemic programs is likely to bring the total down in the coming weeks.
Wall Street continued to report lower public access despite better-than-expected job news.
While claims numbers generally remain high by historical standards, the employment situation is clearly better than a year ago.
For the week ending March 21, 2020, claims totaled 3.3 million and would explode a week later to nearly 6.9 million as companies laid off employees amid a wave of government-mandated closures in the US. whole country.
Weekly claims would not fall below 1 million until the end of August, and 22.4 million workers would lose their jobs in March and April. Since then, nearly 13 million of those jobs have been recovered.
Despite the stronger job picture, Jerome Powell, chairman of the Federal Reserve, said on Thursday that the central bank will continue its aggressive policy to boost growth.
“We will be very, very gradually over time and with great transparency, when the economy has almost fully recovered, we will withdraw the support we have provided during emergencies,” Powell told NPR’s “Morning Edition”.