Weekly applications for jobless aid dropped 12,000 to a seasonally adjusted 267,000, the Labor Department said Thursday, near 15-year lows reached two months ago. The four-week average, a less volatile measure, declined 2,000 to 276,750.
The figures suggest that Americans are enjoying solid job security. Applications, a proxy for layoffs, have remained below 300,000, a historically low level, for 15 weeks. The trend indicates that employers are confident enough in future consumer demand to retain their staffs.
The data is "very encouraging labour market news," said Jennifer Lee, an economist at BMO Capital Markets.
The number of people receiving benefits fell 50,000 to 2.22 million. That figure has fallen 14 per cent in the past year.
Employers have also hired at healthy levels in recent months. They added 280,000 jobs in May, a strong showing. Last year's monthly average of 263,667 was the most in 15 years.
The unemployment rate rose to 5.5 per cent in May from 5.4 per cent in April, but even that contained some good news: More Americans, encouraged by their prospects, started looking for work last month. Not all immediately found jobs, so their numbers lifted the unemployment rate.
Other data show that the economy is picking up after faltering at the start of the year. Americans stepped up their spending at retail stores in May, a sign that job growth and cheaper gas prices are finally encouraging more consumers to spend freely. And consumers ramped up their car purchases in May to the fastest sales pace since July 2005.
A healthier consumer could be a key driver of growth in the second half of this year. Consumer spending accounts for about 70 per cent of economic activity.
The economy contracted 0.7 per cent in the first three months of the year, a sharp slowdown from growth of 3.6 per cent in the second half. Yet that is seen as temporary: most economists expect growth will recover to a 2 per cent to 2.5 per cent pace in the second quarter.