Initial jobless insurance claims fell unexpectedly sharply last week as there were signs that recruitment in the U.S. economy has been picking up, the Department of Labor reported Thursday.
Claims totaled 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 sharp drop from 781,000 from a week earlier and the lowest since March 14, 2020, when the pandemic began.
Economists polled by Dow Jones had expected 735,000 claims.
A separate release on Thursday showed that gross domestic product was stronger than expected in the fourth quarter. The third and final reading of GDP was up 4.3% from previous estimates and the Wall Street consensus of 4.1%.
However, policymakers have been watching the employment data more closely for clues as to where the economy is headed.
Last week’s progress has shown the labor market is picking up pace amid aggressive government incentives and a vaccination program that sees nearly 2.5 million Americans being shot every day to stop the spread of Covid.
The latest weekly loss figure also marks the first time that the figure is below the prepandemic record of 695,000 hits in early October 1982.
In addition to the decrease in weekly claims, ongoing claims that were a week ago decreased to 3.87 million, down from 264,000.
The total number of beneficiaries rose to nearly 19 million, although that data is two weeks behind the claims figures. A sustained decline in those receiving assistance through special programs from the pandemic season is likely to lower the total in the coming weeks.
Wall Street continued to display a lower open despite better-than-expected job news.
While the loss figures are still high overall in historical comparison, the employment situation is significantly better than a year ago.
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For the week ending March 21, 2020, claims totaled 3.3 million and would explode to nearly 6.9 million a week later as companies laid off workers amid a spate of government-ordered shutdowns across the country.
Weekly entitlements would not fall below 1 million by the end of August, and 22.4 million workers would lose their jobs in March and April only. Almost 13 million of these jobs have since been restored.
Despite the stronger employment picture, Federal Reserve Chairman Jerome Powell announced Thursday that the central bank would continue aggressive policies to further stimulate growth.
“We will, over time, very, very gradually, and with great transparency, when the economy has almost completely recovered, withdraw the support we gave in times of need,” Powell told NPR’s Morning Edition.