Weekly unemployment benefit applications dropped 6,000 to a seasonally adjusted 289,000, the Labor Department said Thursday. That is the lowest level since late October.
The four-week average, a less volatile measure, declined 750 to 298,750.
Applications are a proxy for layoffs. The average has fallen nearly 13 per cent in the past year, evidence the job market is improving. Companies are cutting fewer jobs as the economy expands and hiring has picked up.
In the first 11 months of this year, employers have added 2.65 million jobs. That already makes 2014 the best year for hiring since 1999.
The figures are "low enough to signal very strong payroll growth," said Ian Shepherdson, an economist at High Frequency Economics. The current level of applications is consistent with monthly job gains of about 300,000, he added.
Just 2.37 million people are receiving benefits, down from more than 4 million a year ago. Some former recipients have found jobs, but many have used up all the benefits available to them. A federal extended benefits program expired at the end of last year. Barely a quarter of the 9.1 million people out of work receive unemployment aid.
Still, hiring is accelerating. Employers added 321,000 jobs in November, the most in nearly three years. The unemployment rate held steady at 5.8 per cent, down from 7 per cent 12 months earlier.
The average hourly wage rose 9 cents to $24.66, the biggest gain in 17 months. Over the past 12 months, hourly pay has risen 2.1 per cent, above the 1.3 per cent inflation rate.
Other recent data also point to an improving economy. Shoppers spent more in November at retail stores and restaurants, as tumbling gas prices left them with more money to spend on other goods and services.
And factory output rose at a healthy clip last month, fueled by more auto production. Manufacturing output has now surpassed its pre-recession peak.