By Sarah Chaney Cambon 

Unemployment claims declined to the lowest level since the coronavirus pandemic struck last spring, adding to signs the U.S. economic revival is picking up speed.

Jobless claims, a proxy for layoffs, fell to 576,000 last week from 769,000 a week earlier. That is the lowest weekly figure since March 2020. Claims remain higher than the pre-pandemic levels of around 220,000, but economists expect they will continue to drop as the recovery accelerates.

"We are seeing both a strong reopening and rehiring in the economy at this time," said Kathy Bostjancic, economist at Oxford Economics. "It's been faster than most economists expected."

Several factors are converging to boost growth across the economy. Vaccination rates are powering consumer spending, governments are relaxing restrictions on businesses, and federal-stimulus funds are flowing through the economy.

U.S. employers added 916,000 jobs in March, and the jobless rate edged down to 6%, from 6.2% in February. Consumers are spending more on gyms, restaurants, hotels and other services that they had shunned over the past year. U.S. retail sales surged 9.8% in March from the month before, the largest monthly gain since last May, the Commerce Department reported Thursday.

Jobless claims have been especially choppy during the pandemic. States have struggled to process historically high numbers of claims, creating backlogs. Many have also struggled with unemployment-insurance fraud, which can distort weekly claims counts.

The four-week moving average for claims, which smooths out weekly volatility, declined last week to a pandemic low of 683,000.

The total number of people receiving unemployment assistance is declining as the labor market heals. About 16.9 million people were collecting unemployment benefits through state and federal programs in the week ended March 27, down from 18.2 million a week earlier.

The labor market still has a long way to go before achieving a full recovery. As of March, U.S. payrolls remained 8.4 million below their level in February 2020.

Many workers are also facing long spells of joblessness. About 5.2 million Americans who exhausted their regular state benefits were drawing on extended benefits through a federal program in late March.

President Biden recently signed a $1.9 trillion relief package into law that provides stimulus checks to many households and extends supplemental jobless benefits originally set to expire March 14. Workers claiming unemployment benefits can now receive an additional $300 a week through early September.

Write to Sarah Chaney Cambon at sarah.chaney@wsj.com

(END) Dow Jones Newswires

April 15, 2021 10:04 ET (14:04 GMT)

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