WASHINGTON (AP) — The number of Americans seeking unemployment benefits fell last week to nearly the lowest level in seven years, a sign hiring may be picking up.
Weekly applications for unemployment aid dropped 27,000 to a seasonally adjusted 300,000, the Labor Department said Thursday. That's just above a seven-year low reached three weeks ago. The four-week average, a less volatile measure, fell to 311,500, the fewest since August, 2007.
Applications are a proxy for layoffs, so the drop suggests companies are cutting fewer jobs. When employers are confident enough to keep staff, they may also step up hiring. That is a good sign ahead of May's jobs report, to be released next Friday.
The downward trend in layoffs also suggests employers have shrugged off a dismal economic performance in the first three months of the year. A separate government report Thursday showed that the economy shrank 1 percent at an annual rate in the first quarter, due largely to the impact of freezing winter weather.
Yet applications for unemployment benefits have fallen 10 percent since the year began, a clear signal that employers aren't worried about a longer-term slowdown. Many economists expect growth will rebound to a 3.8 percent pace in the second quarter.
"The data remain extremely encouraging," Jim O'Sullivan, chief U.S. economist at High Frequency Economics, said in a research note. The report "suggests that the pick-up (in hiring) is continuing," he added.
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