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Applications for US unemployment benefits fall to 297,000, lowest level in 7 years

In this April 23, 2014 photo, Davon Tremble, of Detroit, fills out an application at a job fair at the Matrix Center in Detroit. The Labor Department reports the number of people who applied for unemployment benefits last week on Thursday, May 15, 2014. (AP Photo/The Detroit News, David Coates)

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In this April 23, 2014 photo, Davon Tremble, of Detroit, fills out an application at a job fair at the Matrix Center in Detroit. The Labor Department reports the number of people who applied for unemployment benefits last week on Thursday, May 15, 2014. (AP Photo/The Detroit News, David Coates)

WASHINGTON - The number of people seeking U.S. unemployment benefits fell to the lowest level in seven years last week, a sign the job market is steadily improving.

Weekly unemployment benefit applications dropped 24,000 to 297,000, the Labor Department said Thursday. That's the fewest since May 12, 2007. The four week average, a less volatile measure, dipped 2,000 to 323,250.

Applications are a proxy for layoffs, so the decline is evidence that employers are cutting fewer jobs. Weekly applications topped 650,000 in March 2009, during the Great Recession.

Fewer people are also receiving benefits each week. The number of recipients fell to 2.67 million, the fewest since Dec. 1, 2007, when the recession began.

As applications have declined, hiring has picked up. Employers added the most jobs in 2 1/2 years in April. Job gains have averaged 214,000 in the first four months of this year, up from an average of 194,000 in 2013.

The unemployment rate fell to 6.3 per cent last month, from 6.7 per cent. But the drop occurred because fewer people looked for work. The government doesn't count people as unemployed unless they are actively searching.

The improved hiring may help boost economic growth for the rest of the year.

The economy grew just 0.1 per cent at an annual rate in the first three months of this year, largely because cold weather kept consumers away from shopping malls and discouraged home and car sales. Data released since then has suggested that the economy actually contracted in the first quarter by as much as 0.8 per cent, analysts say. The government will release updated figures for the first quarter at the end of the month.

Still, analysts expect the economy will rebound in the current April-June quarter and grow at a healthy pace of about 3.5 per cent. Consumer and business spending and homebuilding are rebounding from the cold weather.

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