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 for the second straight week, 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.
The unemployment rate has fallen from 9.1 per cent in August to 8.1 per cent last month. And employers have added a million jobs over the past five months.
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.
But economists have cautioned that a warm winter led companies to move up some hiring and accelerate other activity that normally wouldn't occur until spring. That gave the appearance that the economy had strengthened in January and February and weakened in early spring.
And temporary layoffs stemming from spring holidays likely pushed unemployment benefit applications higher in April, economists noted.
If applications stay where they are or fall further, job growth should pick up. The gains may not match those from earlier in the year, when the economy averaged 252,000 jobs per month from December through February. But several economists said they expect somewhere in the range of 150,000 to 200,000 new jobs each month.
A jump in job openings supports the notion of stronger hiring in the coming months. Employers advertised 3.74 million job openings in March, the most since July 2008. It usually takes one to three months for employers to fill openings.
Other signs suggest the economy is strengthening after its early spring lull.
Home construction rose to near a three-year high in April. And factory output has risen in three of the year's first four months.
The gains, highlighted in data released Wednesday, suggest growth in the April-June quarter is off to a good start.
Consumers are also finally seeing some relief from high gas prices. The average price of a gallon of gas was $3.73 on Wednesday, according to AAA. That's 18 cents less than a month ago.
So consumers should have more money for other purchases, which could also boost second-quarter growth and help lift hiring. Consumer spending drives roughly 70 per cent of economic activity in the U.S.