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The number of people seeking U.S. unemployment benefits was unchanged last week, suggesting modest but steady gains in the job market.
The Labor Department said Thursday that weekly unemployment aid applications stayed at a seasonally adjusted 370,000, the same level as the previous week. The four-week average, a less volatile measure, fell from roughly 380,000 to 375,000.
Applications for benefits surged in April to a five-month high of 392,000. They have fallen back since then and are near the lowest levels in four years.
The decline suggests hiring could pick up in May after slumping in the previous two months. When applications drop below 375,000 a week, it generally suggests hiring is strong enough to lower the unemployment rate.
"Although another decline would have been preferred, the results weren't that bad," said Jennifer Lee, an economist at BMO Capital Markets, in a note to clients. "It does raise the possibility that we may see a pickup in hiring in May."
The unemployment rate has fallen from 9.1 percent in August to 8.1 percent last month. Part of the reason for the drop is that employers have added a million jobs over the past five months. But it has also declined because some people gave up looking for work. The government only counts people as unemployed if they are actively looking for a job.
The pace of hiring slowed sharply in March and April, to an average of 135,000 jobs per month. That raised fears that the job market is weakening.
But economists have cautioned that a warm winter led companies to move up some hiring and accelerate other activity that normally wouldn't occur until spring. That gave the appearance that the economy had strengthened in January and February and weakened in early spring.
And temporary layoffs stemming from spring holidays likely pushed unemployment benefit applications higher in April, economists noted.
If applications stay where they are or fall further, job growth should pick up. The gains may not match those from earlier in the year, when the economy averaged 252,000 jobs per month from December through February. But several economists said they expect somewhere in the range of 150,000 to 200,000 new jobs each month.
A jump in job openings supports the notion of stronger hiring in the coming months. Employers advertised 3.74 million job openings in March, the most since July 2008. It usually takes one to three months for employers to fill openings.
"Rising job openings and relatively flat new filings for unemployment benefits do not point to any underlying slowdown in job creation and we would expect, therefore, a pickup in May from April's rather subdued pace of employment growth," said John Ryding and Conrad DeQuadros, analysts for RDQ Economics, in a note to clients.
The number of people on the unemployment benefit rolls is falling steadily, largely because many states are ending some extended benefit programs. The number of recipients dropped by almost 150,000 to 6.3 million in the week ended April 28, the latest data available.
Other signs suggest the economy is strengthening after its early spring lull.
Home construction rose to near a three-year high in April. And factory output has risen in three of the year's first four months.
The gains, highlighted in data released Wednesday, suggest growth in the April-June quarter is off to a good start.
Consumers are also finally seeing some relief from high gas prices. The average price of a gallon of gas was $3.73 on Wednesday, according to AAA. That's 18 cents less than a month ago.
So consumers should have more money for other purchases, which could also boost second-quarter growth and help lift hiring. Consumer spending drives roughly 70 percent of economic activity in the U.S.