Weekly jobless claims tumble to lowest level in more than a year

First-time claims for unemployment insurance unexpectedly fell sharply last week amid signs that hiring has picked up in the U.S. economy, the Labor Department reported Thursday.

Claims totaled 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 decline from the 781,000 from a week ago and was the lowest since March 14, 2020, just as the pandemic had begun.

Economists surveyed by Dow Jones had been expecting claims to total 735,000 after an unexpected spike the week before.

A separate release Thursday morning showed that gross domestic product was stronger than anticipated in the fourth quarter. The third and final reading on GDP showed a gain of 4.3%, up from previous estimates and the Wall Street consensus of 4.1%.

Policymakers have been watching the jobs data more closely, though, for clues about where the economy is headed. Last week’s progress showed that the jobs market is gaining traction amid aggressive government stimulus and a vaccination program that is seeing close to 2.5 million Americans a day getting shots aimed at stopping the Covid-19 spread.

In addition to the drop in weekly claims, continuing claims, which run a week behind, declined to 3.87 million, a slide of 264,000.