With the more closely watched monthly jobs report looming, the Labor Department released a report on Thursday showing first-time claims for U.S. unemployment benefits fell by much more than expected in the week ended May 1st.
The report said initial jobless claims slid to 498,000, a decrease of 92,000 from the previous week's revised level of 590,000.
Economists had expected initial jobless claims to edge down to 540,000 from the 553,000 originally reported for the previous week.
With the much bigger than expected decrease, jobless claims once again fell to their lowest level since hitting 256,000 in the week ended March 14, 2020.
The less volatile four-week moving average also dropped to a more than one-year low of 560,000, a decrease of 61,000 from the previous week's revised average of 225,500.
Meanwhile, the report showed continuing claims, a reading on the number of people receiving ongoing unemployment assistance, rose by 37,000 to 3.690 million in the week ended April 24th.
The four-week moving average of continuing claims still edged down to 3,675,750, a decrease of 6,750 from the previous week's revised average of 3,682,500.
The drop pulled the four-week moving average of continuing claims down to its lowest level since the week ended March 28, 2020.
"Claims have declined by 33% since the start of April, further confirmation that a recovery in the labor market is well underway," said Nancy Vanden Houten, Lead Economist at Oxford Economics. "We expect more evidence of that recovery in tomorrow's April jobs report."
On Friday, the Labor Department is scheduled to release its more closely watched monthly employment report for April.
Economists currently expect employment to jump by 978,000 jobs in April after surging up by 916,000 jobs in May. The unemployment rate is also expected to dip to 5.8 percent from 6.0 percent.