U.S. State Jobless Claims Fell to Pandemic-Era Low Last Week

Applications for U.S. unemployment benefits fell to the lowest in a year, signaling improvement for the labor market as more Americans get Covid-19 vaccinations and business restrictions ease in many states.

Initial claims in regular state programs fell by 97,000 to 684,000 in the week ended March 20, Labor Department data showed Thursday. On an unadjusted basis, the claims decreased by 100,412 to 656,789 last week, led by sharp drops in Illinois and Ohio. The median estimate in a Bloomberg survey had called for 730,000 initial claims.

The initial claims figures suggest that job cuts are easing as businesses reopen and vaccine eligibility expands to more Americans. It was the first time claims dipped below 700,000 since the pandemic began. At the same time, the labor market recovery still has a long way to go -- weekly claims remain above the peak during the last recession.

Also, jobless claims have been volatile as the pandemic dragged on. Rising fraud and an precedented surge in the number of people filing for unemployment benefits also created backlogs and delays.

”Claims definitely have peaked and they have been coming down, so they’re on the right path,” said Jennifer Lee, senior economist at BMO Capital Markets. Until initial claims are in the 300,000 range, however, “I’m not going to get overly excited,” she said.