Applications for U.S. unemployment benefits fell to the lowest in a year, signaling improvement for the labor market as more Americans get Covid-19 vaccinations and business restrictions ease in many states.

Initial claims in regular state programs fell by 97,000 to 684,000 in the week ended March 20, Labor Department data showed Thursday. On an unadjusted basis, the claims decreased by 100,412 to 656,789 last week, led by sharp drops in Illinois and Ohio. The median estimate in a Bloomberg survey had called for 730,000 initial claims.

Continuing claims -- an estimation of the number of Americans collecting ongoing benefits -- decreased by 264,000 to 3.87 million in the week ended March 13.

Filings for U.S. initial jobless benefits fell more than expected last week

The initial claims figures suggest that job cuts are easing as businesses reopen and vaccine eligibility expands to more Americans. But the labor market recovery still has a long way to go -- weekly claims remain above the peak during the last recession.

While the recovery is progressing more quickly than expected, some sectors hit hardest by the virus remain weak, Federal Reserve Chair said in remarks before Congress earlier this week.

“We welcome this progress, but will not lose sight of the millions of Americans who are still hurting, including lower-wage workers in the services sector, African Americans, Hispanics, and other minority groups that have been especially hard hit,” Powell said in prepared remarks during a House Financial Service Committee hearing Tuesday.

U.S. gross domestic product rose at a 4.3% annualized rate in the fourth quarter, the Commerce Department’s third estimate showed Thursday. Corporate profits fell 1.4% in the final three months of the year.