The number of Americans filing new claims for unemployment benefits fell below 500,000 last week for the first since the COVID-19 pandemic started more than a year ago, signaling the labor market recovery had entered a new phase amid a booming economy.

That was reinforced by other data on Thursday showing US-based employers in April announced the fewest job cuts in nearly 21 years. The reports added to other upbeat employment data in suggesting that the economy enjoyed another blockbuster month of job growth in April.

But the labor market is not out of the woods yet, with about 16.2 million people still collecting unemployment checks.

Initial claims for state unemployment benefits tumbled 92,000 to a seasonally adjusted 498,000 for the week ended May 1, the Labor Department said. That was the lowest since mid-March 2020, when mandatory shutdowns of nonessential businesses were enforced to slow the first wave of COVID-19 infections.

Economists polled by Reuters had forecast 540,000 applications for the latest week. The decline in claims was led by Virginia, Florida, New York and California.

The government has provided nearly $6 trillion in pandemic relief over the past year. Americans over the age of 16 are now eligible to receive the COVID-19 vaccine, leading states like New York, New Jersey and Connecticut to lift most of their coronavirus capacity restrictions on businesses.

The massive fiscal stimulus and rapidly improving public health situation are unleashing pent-up demand, resulting in a scramble for workers by companies.