Unemployment aid applications near a 4-year low

WASHINGTON - The number of people seeking unemployment aid neared a four-year low last week, an encouraging sign that strong hiring could continue in the coming months.

The Labor Department said Thursday that weekly applications for unemployment benefits fell 15,000 to a seasonally adjusted 358,000. That's the second-lowest level since April 2008.

The four-week average, a less volatile measure, fell to 366,250, the lowest since late April 2008. When applications fall consistently below 375,000, it usually signals that hiring is strong enough to lower the unemployment rate.

A consistent decline in applications has coincided with the best job growth since last spring.

Employers added a net gain of 243,000 jobs in January, far more than economists had projected. That was the biggest gain in nine months. The unemployment rate fell for the fifth straight month to 8.3 percent.

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From November through January, the economy has added an average of 201,000 net jobs per month.

The increased hiring in part reflects faster economic growth. The economy expanded at an annual rate of 2.8 percent in the final three months of last year - a full percentage point higher than the previous quarter.

Most economists expect growth will slow a bit in the current quarter, because companies won't need to rebuild their stockpiles of goods as much as they did in the winter.

But some economists are increasingly optimistic that the economy will steadily expand this year, given last month's unexpectedly large job gains and other positive signs.

U.S. manufacturing activity grew in January at the fastest pace in seven months. Americans are buying more cars and trucks. And consumers stepped up borrowing in November and December by the most in a decade, which could indicate they are growing more confident in the economy.

Still, the job market has a long way to go before it fully recovers from the damage of the Great Recession. Nearly 13 million people remain unemployed, and 8.3 percent unemployment is painfully high.

One reason the unemployment rate has fallen for five straight months is that many people have stopped looking for work. The government only counts people as unemployed if they are actively searching for a job.

The figures come a week after the government reported that employers added 243,000 net jobs last month. That pushed the unemployment rate down to 8.3 percent, the lowest in nearly three years.

When applications fall consistently below 375,000, it usually signals that hiring is strong enough to lower the unemployment rate.