WASHINGTON (AP)—The number of Americans seeking unemployment aid plummeted last week to seasonally adjusted 339,000, the lowest level in more than four years. The sharp drop offered a hopeful sign that the job market could pick up.
The Labor Department said Thursday that weekly applications fell by 30,000 to the fewest since February 2008. The four-week average, a less volatile measure, dropped by 11,500 to 364,000, a six-month low.
The positive figures follow a report last week that said the unemployment rate fell in September to 7.8 percent. It was the first time since January 2009 that the rate dropped below 8 percent.
A Labor Department spokesman cautioned that the weekly applications can be volatile, particularly at the start of a quarter. And the spokesman said one large state accounted for much of the decline. The spokesman did not name the state.
Unemployment benefit applications are a proxy for layoffs. When they consistently drop below 375,000, it suggests that hiring is strong enough to lower the unemployment rate.
Some economists said they want to see more data before suggesting the job market is turning around.
"Should this level hold for another week, it would flag a meaningful improvement in October" hiring, said Sal Guatieri, senior economist at BMO Capital Markets, in a note to clients.
Dan Greenhaus, chief market strategist at BTIG LLC, is also reserving judgment. "Are things that much better all of a sudden? Perhaps. We're going to wait for some corroborating data."