New applications for US unemployment benefits dipped below 300,000 for the first time since the pandemic began, a milestone in the labor market's recovery from the devastation wrought by the virus last year.

President Joe Biden heralded the data as a victory for his policies.

The tally of weekly applications for jobless aid became one of the most visible signs of economic ravages of Covid-19, as the total surged into the millions in March 2020.

Claims have declined steadily this year as vaccines allowed employers to rebuild their staff, and the total dropped to 293,000 in the week ended October 9, the lowest level since the crisis started, the Labor Department reported Thursday.

"With both Covid-19 cases and unemployment claims declining, it is clearer than ever that America is in the midst of an historic economic recovery -- one that continues to lead the world," Biden said about the data.

Since taking office in January, Biden has staked his presidency on both fighting off Covid-19 and revitalizing the economy through massive spending bills, one of which he succeeded in passing, though two others aimed at infrastructure and social programs remain mired in Congress.

Even as claims inch closer to 256,000, the level on March 14, 2020, the last week of normalcy before the pandemic shutdowns began, American workers face headwinds.

These include supply chains snarls that have pushed prices up, as well as the Delta variant of the virus, which has fueled a spike in cases in recent weeks though that now appears to be ebbing.

Nonetheless, Ian Shepherdson of Pantheon Macroeconomics said the labor data predict that better days are ahead.

"Claims won't keep falling at the pace seen over the past couple weeks, but the trend clearly is downwards and as the economy re-emerges from the Delta wave, layoffs will decline further," he wrote in an analysis.

Weekly jobless claims have become a closely watched metric of labor market health and remained elevated throughout 2020, but dropped substantially this year as Covid-19 vaccines allowed businesses to reopen
Weekly jobless claims have become a closely watched metric of labor market health and remained elevated throughout 2020, but dropped substantially this year as Covid-19 vaccines allowed businesses to reopen AFP / Olivier DOULIERY

Applications from workers seeking jobless benefits remained elevated for much of 2020 before vaccines brought a decisive decline this year, though the fast-spreading Delta variant's wave of infections arrested that progress in recent weeks.

Initial claims last week fell by 36,000 from the prior week, while the report said another 21,624 claims, not seasonally adjusted, were filed under the now-expired Pandemic Unemployment Assistance program, which was created to aid freelance workers not normally eligible for aid.

All told, more than 3.6 million people were receiving jobless benefits under all programs as of the week ended September 25, the latest for which data was available.

"The claims data are consistent with an improving employment situation," Nancy Vanden Houten of Oxford Economics said in an analysis.

"We expect further progress in the months ahead as the health situation is improving following the surge in cases over the summer from the Delta variant."

In a sign of the economy's ongoing challenges, a separate Labor Department report showed wholesale prices spiking 8.6 percent in the 12 months ended in September, their biggest increase in a decade and a sign of the continued potency of the inflation wave.

That comes on top of data earlier this week showing consumer prices remained high at 5.4 percent.

Coronavirus