Jobless claims: Four-week average lowest since Feb. 2006

WASHINGTON - Fewer people sought U.S. unemployment benefits last week, as jobless claims remain at relatively low levels that point toward stronger economic growth.

Weekly applications for unemployment aid fell 14,000 to a seasonally adjusted 289,000, the Labor Department said Thursday. The prior week's was revised up slightly to 303,000.

The four-week average, a less volatile measure, fell 4,000 to 293,500. That's the lowest average since February 2006, almost two years before the Great Recession began at the end of 2007.

Applications are a proxy for layoffs. When employers keep their workers, it suggests potentially rising incomes, increased hiring activity and confidence that the economy is improving.

Employers added a net total of 209,000 jobs in July, the sixth straight month of job gains above 200,000, the government reported Friday.

The recent spurt of hiring has encouraged more people to start looking for work, causing the unemployment rate to inch up to 6.2 percent from 6.1 percent. The government only counts people searching for jobs as unemployed.

"Through the volatility, the claims data continue to signal an improving labor market," said Jim O'Sullivan, chief U.S. economist for research firm High Frequency Economics. "The decline corroborates the pick-up in payrolls to 230,000 per month so far this year from 194,000 last year; that is clearly much more than enough to keep unemployment trending down."

Still, greater job security and more hiring activity have yet to boost wages by much. Wage growth has slightly outpaced inflation since the recession ended more than five years ago.

But more people with jobs increases the total number of paychecks, which could boost consumer spending and growth