After reporting an unexpected increase in first-time claims for U.S. unemployment benefits in the previous week, the Labor Department released a report on Thursday showing initial jobless claims pulled back by much more than expected in the week ended March 20th.
The report said initial jobless claims slid to 684,000, a decrease of 97,000 from the previous week's revised level of 781,000.
Economists had expected jobless claims to decline to 730,000 from the 770,000 originally reported for the previous week.
With the much bigger than expected decrease, jobless claims dropped to their lowest level since hitting 282,000 in the week ended March 14, 2020.
Nancy Vanden Houten, Lead Economist at Oxford Economics, noted new claims for emergency Pandemic Unemployment Assistance benefits also fell, pushing total new claims below 1 million for the first time since the emergency program was created a year ago.
"While the level of claims remains elevated - regular claims are still just above the Global Financial Crisis peak - we expect they will continue to recede as the recovery gains momentum," Vanden Houten said.
The Labor Department said the less volatile four-week moving average also edged down to 736,000, a decrease of 13,000 from the previous week's revised average of 749,000. The four-week moving average also fell to its lowest level in a year.
Continuing claims, a reading on the number of people receiving ongoing unemployment assistance, also tumbled by 264,000 to a nearly one-year low of 3.870 million in the week ended March 13th.
The four-week moving average of continuing claims dropped to 4,120,750, a decrease of 137,250 from the previous week's revised average of 4,258,000.
Next Friday, the Labor Department is scheduled to release its more closely watched report on employment in the month of March.
Economists currently expect employment to jump by 500,000 jobs in March after climbing by 379,000 jobs in February. The unemployment rate is expected to edge down to 6.1 percent from 6.2 percent.
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