The number of Americans applying for unemployment benefits fell by 6,000 last week to a seasonally adjusted 361,000, a level consistent with modest gains in hiring.
The Labor Department says the less volatile four-week average rose by 2,250 to 368,250 in the week that ended Aug. 4.
Weekly applications bounced around in July, skewed by the difficulty of accounting for temporary summertime layoffs in the auto industry. The seasonal distortions had faded by last week.
When applications consistently fall below 375,000, it typically suggests hiring is strong enough to lower the unemployment rate.
Hiring picked up in July after three sluggish months of job growth. The economy generated 163,000 jobs last month, the most since February. Still, the unemployment rate rose to 8.3 percent from 8.2 percent in June.