The number of Americans seeking unemployment benefits dropped 12,000 to a seasonally adjusted 334,000 last week, a hopeful sign that steady job gains will continue.
The four-week average, a less volatile measure, decreased 7,250 to 345,250, the Labor Department said Thursday. Both figures are only about 7,000 above their levels of a month ago, which were the lowest in five years.
Applications are a proxy for layoffs. A decline suggests that companies are cutting fewer jobs. Since January, applications have fallen 6.5 percent.
At the same time, hiring has been steady. Employers added 175,000 jobs in May, the department said last week. That nearly matched the monthly average for the previous year. The unemployment rate ticked up to 7.6 percent.
The economy grew at a solid annual rate of 2.4 percent in the first three months of the year. Consumer spending rose at the fastest pace in more than two years.
Economists were encouraged by both reports.
"The retail sales result is a plus, no question," said Jennifer Lee, an economist at BMO Capital Markets. "And the improving trend in jobless claims is supportive for future spending."
Economists worry that federal spending cuts and higher Social Security taxes, which started Jan. 1, might be slowing growth in the April-June quarter to an annual rate of 2 percent or less. But many expect growth will pick up again at the end of the year.
The department said earlier this week that more Americans quit their jobs in April compared with March. That's a sign of confidence in the job market, since most workers don't quit until they have another job or are sure they can find one. More people quitting jobs also opens up jobs for other workers, or the unemployed, to take.
Overall hiring also picked up in April, the department said, as part of its Job Openings and Labor Turnover survey. Top officials at the Federal Reserve have said they are looking at the level of quits and overall hiring as part of their efforts to gauge the health of the job market.
On Wednesday, a survey of chief executives at the largest U.S. companies showed that they are more optimistic about sales in the next six months and plan to add more workers.
The Business Roundtable said its April-June quarterly survey found 32 percent of its members expect to expand payrolls in the next six months. That's up from 29 percent in the January-March survey. And 78 percent expect their sales to increase. That's up from 72 percent from the previous survey.
Small business owners are also a bit more optimistic, according to a separate survey by the National Federation of Independent Business, released Tuesday.