The Labor Department said Thursday that the four-week average of applications, a less volatile figure, decreased 6,250 to 330,500, the lowest since early December.
Applications are a rough proxy for layoffs. The declines indicate companies are confident enough about the economy to keep their staffs.
Employers are also hiring more after harsh winter weather lowered job gains in January and December, the government said last week. The economy gained 175,000 jobs last month, up from just 129,000 in January and only 84,000 in December.
The report "supports the idea that the labour market is still improving," said Dan Greenhaus, chief strategist at brokerage firm BTIG. "This is another unquestionable positive."
About 3.45 million people received unemployment benefits as of Feb. 22, the latest figures available. That's 13,000 more than the previous week.
In a separate report Thursday, the Commerce Department said that sales at retail stores and restaurants rose 0.3 per cent last month. The rebound suggests consumers are spending a bit more after sales fell a sharp 0.6 per cent in January.
The unemployment applications and retail sales suggest the economy is recovering after harsh winter weather caused auto sales to dip, factory orders to fall, and sales of existing homes to plummet.
The unemployment rate ticked up last month to 6.7 per cent from 6.6 per cent, but the increase occurred partly for a good reason: more people started looking for jobs. Most weren't immediately hired, boosting the unemployment rate. But the fact that they started job hunting suggests they were optimistic about their prospects.
The weather did force about 6 million people with full-time jobs to work part-time in February. Many of their paychecks will shrink, likely weighing on spending.
That's one reason economists forecast growth will slow to an annual rate of 2 per cent or less in the first three months of this year, down from 2.4 per cent in the final three months of last year. But as the weather improves, most analysts expect growth to rebound to an annual rate near 3 per cent.