The number of Americans seeking unemployment benefits fell 5,000 to a seasonally adjusted 343,000 last week, a sign that layoffs remain low and companies are adding a modest number of jobs.
The four-week average, a less volatile figure, dipped just 750 to 345,500, the Labor Department said Wednesday. The average has fallen 9 percent in the past year.
Weekly applications for unemployment benefits are a proxy for layoffs. Since March, they have fluctuated roughly between 340,000 and 360,000, a level consistent with steady hiring.
On Friday, the government will issue its June jobs report. Economists forecast that it will show employers added 165,000 jobs, slightly below the 175,000 gain in May. The unemployment rate likely ticked down to 7.5 percent from 7.6 percent. The economy has added an average of about 175,000 jobs per month for the last two years.
In a separate report, payroll provider ADP said that businesses added 188,000 jobs in June, up from 134,000 in May and the most since February. That's a hopeful sign hiring is picking up a bit.
ADP's survey has frequently diverged from the government's figures. Still, Jennifer Lee, an economist at BMO Capital Markets, said the report and the low number of unemployment benefits were encouraging.
More hiring could help the economy grow faster later this year. The economy expanded at only a 1.8 percent annual rate in the January-March quarter. Most analysts think it grew at a similarly tepid annual pace between 1.5 percent and 2 percent in the April-June period.
Two reports this week suggested that manufacturers are receiving more orders and are likely producing more but aren't necessarily hiring more workers.
A survey by the Institute for Supply Management showed that manufacturing activity expanded in June after shrinking in May. Measures of new orders and production rose.
But a gauge of hiring fell, indicating that factories cut jobs for a fourth straight month.
A separate report from the Commerce Department said U.S. factories fielded more orders for computers, machinery and other goods in May.
Other recent economic reports have been encouraging. Home prices are rising at a healthy pace, signaling a steady housing recovery. That trend should help boost construction jobs.
Spending at retail businesses rose in May, a sign that solid job growth has encouraged Americans to open their wallets. And the improving job market has lifted consumer confidence to its highest point in 5½ years.
Here are the states with the biggest increases and decreases in applications. The state level figures are for the week ended June 22, one week behind the national data:
States with the biggest decreases:
Pennsylvania: Down 4,238, due to fewer layoffs in transportation, construction, entertainment, hotels and restaurants, and health care
Florida: Down 2,050, due to fewer layoffs in agriculture, construction, and retail
North Carolina: Down 2,009, due to fewer layoffs in construction, transportation and warehousing
Ohio: Down 1,679, due to fewer layoffs in manufacturing, retail and consumer lending
Kentucky: Down 1,466, no reason given
Illinois: Down 1,298, no reason given
States with the biggest increases:
California: Up 6,181, due to layoffs in services
New Jersey: Up 4,952, due to layoffs in transportation and warehousing, hotels and restaurants, education and manufacturing
Oregon: Up 2,076, due to layoffs in education
New York: Up 1,882, due to layoffs in restaurants, construction and health care