The number of people seeking unemployment benefits in the United States fell sharply last week to 684,000, the fewest since the pandemic erupted a year ago and a sign that the economy is improving.

Thursday’s report from the Labor Department showed that jobless claims fell from 781,000 the week before. It is the first time that weekly applications for jobless aid have fallen below 700,000 since mid-March of last year. Before the pandemic tore through the economy, applications had never topped that level.

The number of people seeking benefits under a federal program for self-employed and contract workers also dropped, to 241,000, from 284,000 a week earlier. All told, the number of applicants fell below 1 million for the first time since the pandemic.

Economists are growing more optimistic that the pace of layoffs, which has been chronically high for a full year, is finally easing.

“While the level of claims remains elevated,” said Nancy Vanden Houten, an economist at Oxford Economics, “we expect they will continue to recede as the recovery gains momentum.”

Still, a total of 18.9 million people are continuing to collect jobless benefits, up from 18.2 million in the previous week. Roughly one-third of those recipients are in extended federal aid programs, which means they’ve been unemployed for at least six months.

Their prolonged joblessness could prove to be a long-term hindrance: Typically, many people who have been unemployed for extended periods struggle to find work even as the economy regains its health.

The economy has been showing signs of emerging from the pandemic crisis with renewed vigor, with spending picking up, manufacturing strengthening and employers adding workers. Hiring increased in February, with 379,000 added jobs — more than double January’s total. The economy expanded at a 4.3-percent annual rate in the final three months of last year, the government estimated Thursday, slightly faster than its previous estimate. That pace is widely expected to accelerate in the coming months, fueled by substantial government rescue aid.

Credit card data from JPMorgan Chase showed that consumer spending jumped last week as the $1,400 checks that are going to most adults under President Joe Biden’s $1.9 trillion emergency aid package began to be paid out. The Treasury says it has so far distributed 127 million payments worth $325 billion.

Last week, Federal Reserve policymakers substantially boosted their forecast for the economy this year, anticipating growth of 6.5 percent for 2021, up from an estimate of just 4.2 percent three months ago. That would be the fastest rate of expansion in any year since 1984. The Fed also projects that the unemployment rate will reach 4.5 percent by the end of this year, down from the current 6.2 percent.

Some individual states reported sharp drops in applications for aid last week. In Illinois, they tumbled 80 percent to just under 15,000. In Ohio, which several weeks ago had flagged a significant portion of claims as fraudulent, they fell by nearly a third to 69,000.

Nationally, though, the number of recipients in an extended federal jobless benefits program jumped by 730,000 to 5.5 million. Nearly all the increase occurred in California, which has a biweekly filing system that can cause sharp fluctuations, up or down, from week to week.

Historically, the weekly unemployment claims figure has been considered an accurate reflection of the pace of layoffs. But that connection has weakened during the pandemic. Widespread fraud and the processing of backlogged claims have distorted many states’ jobless aid data. That has been particularly true for the federal program that covers self-employed and gig workers; this data has fluctuated wildly in many states.