A report released by the Labor Department on Thursday showed a steep drop in first-time claims for U.S. unemployment benefits in the week ended February 20th.
The Labor Department said initial jobless claims tumbled to 730,000, a decrease of 111,000 from the previous week's revised level of 841,000.
Economists had expected jobless claims to drop to 838,000 from the 861,000 originally reported for the previous week.
With the much bigger than expected decrease, jobless claims fell to their lowest level since hitting 716,000 in the week ended November 28th.
"The drop may be signaling a turning point for labor market conditions," said Nancy Vanden Houten, Lead Economist at Oxford Economics. "However, the data continue to suffer from noise related to issues of backlogs and fraud."
She added, "We expect a more sustainable labor market recovery to take hold closer to mid-year with broader vaccine distribution and the arrival of more fiscal support."
The report showed the less volatile four-week moving average also fell to 807,750, a decrease of 20,500 from the previous week's revised average of 828,250.
Continuing claims, a reading on the number of people receiving ongoing unemployment assistance, also declined by 101,000 to 4.419 million in the week ended February 13th.
The four-week moving average of continuing claims dropped to 4,547,000, a decrease of 91,500 from the previous week's revised average of 4,638,500.
Next Friday, the Labor Department is scheduled to release its more closely watched monthly employment report for February.