The Labor Department said Thursday that weekly applications dropped 5,000 to a seasonally adjusted 348,000, the lowest level since February 2008. The four-week average of applications, a less volatile measure, dipped to 355,000. That's also a four-year low.
Applications have steadily declined since last fall. The drop has coincided with the best three months of hiring in two years. From December through February, employers added an average of 245,000 jobs per month. That's pushed down the unemployment rate to 8.3 per cent, the lowest in three years.
The report suggests that employers likely added a similar level of jobs in March.
Companies are hiring more because the economy is picking up. The economy grew at an annual rate of 3 per cent in the final three months of last year. That was better than the 1.7 per cent rate in the previous quarter.
There are other signs the economy is steadily recovering. Consumers are more confident and have stepped up spending. Auto sales are rising. Even the battered housing market is showing signs of improving.
January and February comprised the best winter for sales of previously occupied homes in five years, according to figures released Wednesday by the National Association of Realtors. January sales were the most since May 2010, the final month that a federal tax credit for home buyers was available. Sales dipped in February but were still 13 per cent higher than six months earlier.
Developers are even seeking to build more homes. Requests for permits to build single-family homes and apartments rose 5 per cent last month. That brought the annual rate for permits to the highest since October 2008, though they are still running at about half the rate of a healthy market.
One concern is that rising gas prices will force consumers to cut back on discretionary spending. That could weigh on economic growth and slow hiring. The Federal Reserve says it expects oil and gas prices to temporarily boost inflation but predicts that longer-term inflation should remain stable.
The job market still has a ways to go to fully recover from the Great Recession. More than 12.8 million people remain unemployed and the economy still has 5 million fewer jobs than before the downturn.
But the more robust job market has caused some so-called "discouraged workers" to start looking again. The work force rose by nearly a half-million in February.Suggest a correction