WASHINGTON (AP) — The number of people seeking U.S. unemployment benefits was unchanged last week, suggesting modest but steady gains in the job market.
The Labor Department said Thursday that weekly unemployment aid applications stayed at a seasonally adjusted 370,000, the same level as the previous week. The four-week average, a less volatile measure, fell from roughly 380,000 to 375,000.
Applications for benefits surged in April to a five-month high of 392,000. They have fallen back since then and are near the lowest levels in four years.
The decline suggests hiring could pick up in May after slumping in the previous two months. When applications drop below 375,000 a week, it generally suggests hiring is strong enough to lower the unemployment rate.
"Although another decline would have been preferred, the results weren't that bad," said Jennifer Lee, an economist at BMO Capital Markets, in a note to clients. "It does raise the possibility that we may see a pickup in hiring in May."
Investors didn't react much to the unemployment claims report, economists said. Stock markets are more focused on the Europe's financial crisis. Worries that Greece might have to exit the euro bloc drove stocks lower Thursday.
Still, Dan Greenhaus, chief economic strategist at BTIG LLC, said investors will likely be disappointed the coming weeks if applications don't fall further.
"You'd like to see 350,000 or less to become convinced that monthly employment gains will accelerate," he said.
A measure of future U.S. economy activity fell in April after reaching a three and a half year high in March. The Conference Board, a business research group, said that its index of leading economic indicators dipped 0.1 percent last month to 95.5.
Before the recession began, the index regularly topped 100.
Another report showed that manufacturing activity in the mid-Atlantic region contracted in May, as companies received fewer new orders and cut their staffs.
The unemployment rate has fallen from 9.1 percent in August to 8.1 percent last month. Part of the reason for the drop is that employers have added a million jobs over the past five months. But it has also declined because some people gave up looking for work. The government only counts people as unemployed if they are actively looking for a job.
The pace of hiring slowed sharply in March and April, to an average of 135,000 jobs per month. That raised fears that the job market is weakening.