WASHINGTON – The number of people seeking U.S. unemployment benefits fell 10,000 last week to a seasonally adjusted 311,000, the lowest since late November and a hopeful sign hiring could pick up.
The four-week average of applications, a less volatile measure, fell 9,500 to 317,750, the Labor Department said Thursday. That is the fourth straight drop and the lowest level in six months.
The sustained decline suggests companies are confident enough about future growth to keep their staffs. Applications are a proxy for layoffs. Greater business confidence can also lead to more hiring.
The four-week average is now near its lowest level since October 2007, just two months before the recession began. It dropped to 305,000 in September, but only because computer glitches in California and other states artificially lowered the figures.
"The downward slide ... in the past month, following weather-related increases previously, signals a pickup" in March hiring, Sal Guatieri, an economist at BMO Capital Markets, said in a note to clients.
About 3.3 million people received benefits in the week ending March 8, the latest data available. That was 43,000 fewer than the previous week.
The steady drop in applications has made economists more optimistic about hiring in March. Several point out that applications have fallen to a level that is consistent with monthly job gains of more than 200,000.
That would be a step up from February, when employers added 175,000 positions. And even February's gain was an improvement from the previous two months of paltry hiring. Cold winter weather in January and December shut down factories, kept consumers away from shops, and reduced home sales. Employers added 129,000 jobs in January and only 84,000 in December.
The unemployment rate rose to 6.7 percent last month. But the tenth of a percentage point increase happened, in part, for a positive reason: more people entered the job market to look for work. Employers didn't immediately hire most of them, causing the unemployment rate to increase. But the fact that they started job hunting suggests they were optimistic about their prospects.
Employers advertised more jobs in January, a separate government report said this month, suggesting that hiring will likely remain steady in the coming months.
More jobs and income will be needed to spur better growth. For now, economists expect the bad weather contributed to weak growth of 1.5 percent to 2 percent at an annual rate in the January-March quarter. But as the weather improves, most analysts expect growth to rebound to near 3 percent.