New claims for unemployment benefits in the US fell to their lowest level since the start of the pandemic as the economy rebounds.
Initial claims for state unemployment benefits came in at 684,000, down from 781,000 a week earlier, according to the Labor Department. Claims are now at their lowest level since the middle of March last year and below the pre-pandemic high of 695,000.
Figures also showed a decline of more than 40,000 in claims for federal pandemic unemployment assistance to 241,745.
Unemployment figures soared in the second week of March likely as delayed claims from the severe storms in Texas started to clear.
Now there are hopes that the economy is starting to rebound particularly as the vaccine rollout starts to pick up.
Last week the Federal Reserve projected a higher than expected jump in US economic growth of 6.5 per cent for this year. It also anticipates the unemployment falling to 4.5 per cent by the end of 2021, compared with the December outlook of five per cent.
“Indicators of economic activity and employment have turned up,” the policy-setting Federal Open Market Committee said in a statement that kept the benchmark overnight interest rate in a target range of zero to 0.25 per cent.
The recovery has also been underpinned by President Biden’s $1.9 trillion rescue plan which is sending fresh aid to businesses and households. Workers claiming unemployment benefits can now receive an additional $300 a week to early September.