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WASHINGTON (AP) — The number of people requesting unemployment benefits last week plunged to a nearly three-year low, bolstering likelihood that companies will increase the pace of hiring this year.
Applications for unemployment benefits fell by 20,000 to a seasonally adjusted 368,000, the Labor Department reported Thursday. It was the third decline in the last four weeks. Applications are now at their lowest level since May 2008.
The four-week average for applications, a less volatile figure, fell last week to 388,500. That's the lowest level since July 2008, the last time the four-week average was below 400,000.
Economists say applications that remain consistently below 375,000 tend to signal declines in the unemployment rate. Applications for benefits peaked during the recession at 651,000.
The downward trend in applications suggests that companies are easing the pace of layoffs now that the economy is gaining momentum. During the recession, companies slashed work forces, cut or froze workers' pay and took other aggressive steps to reduce costs.
Companies are expected to increase hiring in the month ahead.
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