Fewer people applied for unemployment benefits last week, a sign that the job market may be improving slightly.
Weekly applications fell 12,000 to a seasonally adjusted 409,000 last week, the Labor Department said Thursday. It was the first decline in three weeks.
A strike by Verizon workers drove applications higher during the previous two weeks. The strike has ended and is no longer affecting applications.
The four-week average, a less volatile measure, rose last week to 410,250. Still, that was mostly because of the strike. It has come down from 440,250 in May.
Applications typically need to drop below 375,000 to signal sustainable job growth. They haven't been at that level since February.
The downward trend suggests employers aren't stepping up layoffs amid renewed concerns about the economy's health. A sharp reduction in growth has fueled fears that the economy could be at risk of another recession.
Stocks fell sharply in late July and early August. A batch of grim economic data, along with Standard & Poor's downgrade of long-term U.S. debt, led to a sell-off. Stocks have recovered some of their losses. The Dow Jones industrial average is about 9 percent below its July 21 level.
The government reports Friday on job growth in August. While the report is always important, economists will pay particular attention to the data to see if businesses pulled back on hiring in response to the plunge in stock prices and the gloomy economic outlook.
The economy expanded at an annual pace of just 0.7 percent in the first six months of this year, the weakest six months of growth since the recession officially ended in June 2009. Economists expect growth will only improve to about a 2 percent pace in the second half of this year.
Recent data suggests the July-September quarter is off to better start. Employers added 117,000 net jobs in July, about double the pace of the previous two months. Consumer spending rose that month by the most in five months, partly because Americans bought more cars and spent more to cool their homes. And businesses ordered more goods from factories, particularly autos and airplanes, the Commerce Department said Wednesday
Still, hiring has slowed since earlier this year, and the unemployment rate remains high, at 9.1 percent. The economy added an average of 72,000 jobs from May through July, down from an average of 215,000 per month in the previous three months.
More jobs are needed to fuel faster economic growth. Higher employment leads to more income. That boosts consumer spending, which accounts for about 70 percent of economic growth.
Fewer people are continuing to receive unemployment benefits. About 3.74 million people received benefits in the week ending Aug. 20, a week behind the applications data. That's a drop of 18,000 from the previous week.
But that doesn't include about 3.5 million additional laid-off workers who are receiving extended benefits under an emergency program put in place during the recession. All told, 7.3 million people received benefits in the week ended Aug. 13, the most recent data available.