WASHINGTON — The number of people seeking unemployment benefits fell sharply last week to 684,000, the fewest since the pandemic erupted a year ago and a sign that the economy is improving.
Today’s report from the Labor Department showed that jobless claims fell from 781,000 the week before. It is the first time that weekly applications for jobless aid have fallen below 700,000 since mid-March of last year. Before the pandemic tore through the economy, applications had never topped that level.
A total of 18.9 million people are continuing to collect jobless benefits, up from 18.2 million in the previous week. Roughly one-third of those recipients are in extended federal aid programs, which means they’ve been unemployed for at least six months.
Their prolonged joblessness could prove to be a long-term hindrance: Typically, many people who have been unemployed for extended periods struggle to find work even as the economy regains its health.
The economy has been showing signs of emerging from the pandemic crisis with renewed vigor, with spending picking up, manufacturing strengthening and employers adding workers. Hiring increased in February, with 379,000 added jobs — more than double January’s total.
Credit card data from JPMorgan Chase showed that consumer spending jumped last week as the $1,400 checks that are going to most adults under President Joe Biden’s $1.9 trillion emergency aid package began to be paid out. The Treasury says it has so far distributed 127 million payments worth $325 billion.
Last week, Federal Reserve policymakers substantially boosted their forecast for the economy this year, anticipating growth of 6.5% for 2021, up from an estimate of just 4.2% three months ago. That would be the fastest pace of expansion in any year since 1984. The Fed also projects that the unemployment rate will reach 4.5% by the end of this year, down from the current 6.2%.