Volunteers help sort and distribute food during a weekly mobile food pantry hosted by Forgotten Harvest on Monday, March 1, 2021, in Warren, Mich. Although millions remain jobless and layoffs continue, the latest data adds to evidence that distress is on the decline. (Elaine Cromie/The New York Times)

UNITED STATES — The second year of the coronavirus pandemic is starting with rising hopes for the economic outlook — and a long way to go.

Positive signs are emerging as restrictions on businesses lift and the pace of vaccine distributions ramps up. But millions remain unemployed, and many economists are cautioning that a return to prepandemic conditions could take months, if not years.

That reality became all the more evident Thursday, when the Labor Department reported that a total of 709,000 workers filed first-time claims for state unemployment benefits in the week that ended March 6. Though the figure was 47,000 lower than the week before — and touching the lowest levels of the last year — it was still extraordinarily high by historical standards.

“The story week in and week out is that magnitude steals the show,” said AnnElizabeth Konkel, an economist at the career site Indeed. The report “really paints the picture of long-term joblessness,” she said, adding, “That is the reality for millions of Americans and is going to be a hurdle for the recovery to clear.”

All told, there are about 9.5 million fewer jobs than there were a year ago. More than 4 million people have dropped out of the labor force, a group not included in the most widely cited unemployment rate.

“We’re still not yet at the phase of the recovery where we’re seeing the floodgates open up,” said Daniel Zhao, senior economist with the career site Glassdoor. “I don’t think it’s quite fair to call what we’ve done so far ‘reopening’ because there’s still a lot of people who are out of work and a lot of businesses that are closed.”

On a seasonally adjusted basis, new state unemployment claims last week totaled 712,000, shaking off a surge in the last week of February caused in part by the devastating winter storms in Texas.

In addition to the state claims, there were 478,000 new claims last week for Pandemic Unemployment Assistance, a federal program covering freelancers, part-timers and others who do not routinely qualify for state benefits, an increase of 42,000.

The Labor Department report was released a day after Congress gave final approval to President Joe Biden’s $1.9 trillion relief package, which will inject the economy with a fresh surge of federal aid. The legislation, signed by Biden on Thursday, includes an extension of federal jobless benefits, which could provide a stopgap measure of relief for those still out of work as the labor market begins to heal in earnest after months of uneven improvement.

The provisions come at an urgent moment for the millions of jobless: Democrats had been racing to get the bill signed into law before federal unemployment benefits begin to lapse Sunday. Under its terms, a $300 weekly supplement to other unemployment payments will be extended through Sept. 6. The Pandemic Unemployment Assistance program will be available for at least 79 weeks, up from 50, and run through Sept. 6.

In addition, individuals with an adjusted gross income of $75,000 or less — and married couples filing jointly with incomes of $150,000 or less — will receive direct payments of $1,400 per person.

Economists say the road ahead remains bumpy. States have faced challenges with processing payments and combating fraud as unemployment programs have ramped up, and it is unclear if they will be plagued by similar difficulties with the new round of aid. But now that states have had test runs, there is tentative optimism that such hiccups will not occur.

“We’re hoping that states won’t see any break in benefits, and for those in the midst of receiving benefits, that there will be no disruption,” said Nicole Marquez, director of social insurance at the National Employment Law Project, a research and advocacy group.

That would be a particularly welcome development for the legions of long-term unemployed. According to government data, the number of those jobless for at least six months grew in February to 4.1 million, representing more than 40% of the total number of unemployed.

Still, despite the lingering apprehension about the condition of the economy, recent data has fueled renewed hope in the staying power of the rebound.

The Labor Department reported last week that employers added 379,000 jobs in February, an unexpectedly robust number that reinforced confidence in the strength of the economic recovery roughly one year into the pandemic-induced downturn. The gains came largely in the hard-hit leisure and hospitality industries.

“The pieces are falling into place for a more substantial improvement in the labor market,” said Sarah House, a senior economist at Wells Fargo.

As vaccination rates climb, the weather warms up and additional government help arrives, many economists foresee a more positive trajectory.

“We’re seeing a huge pickup in hiring,” said Julia Pollak, a labor economist with the employment site ZipRecruiter. “I think for many employers, it’s becoming real, and for many job seekers it is as well.”

Copyright 2021 The New York Times Company

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