Jobless claims near 4-year low

The number of people seeking unemployment benefits fell slightly last week to the lowest point in four years, a further sign that the U.S. job market is steadily improving. However, consumer spending was flat in January for the third straight month.

Reuters reported that while an improved jobs market -- the unemployment rate has fallen sharply in recent months -- appears to be boosting incomes, inflation and taxes gobbled up the gains in January.

A seasonally adjusted 351,000 people sought unemployment aid, down from 353,000 the previous week, the Labor Department said Thursday. That matches the four-year low reached three weeks ago. It's the fewest since March 2008.

A four-week average of claims, which smooths out weekly fluctuations in the data, also fell last week, to 354,000. That's also the lowest figure in four years.

Applications have fallen steadily since October. The average has declined 14.6 percent since then. When applications drop consistently below 375,000, it usually signals that hiring is strong enough to lower the unemployment rate.

Economists expect the government to report another strong month of hiring for February, similar to the average net gain of about 200,000 in the previous three months.

A Bloomberg News report said firing is on a downward trend as employers gain confidence in the outlook for economic growth. A smaller number of job reductions also puts those companies in place to hire additional employees as demand picks up.

"Firing is not holding back the labor market," said Ryan Sweet, a senior economist at Moody's Analytics Inc. in West Chester, Pa., who forecast 350,000 claims. "Businesses recognize that they don't need to lay off any more people. Down the road, they're going to realize they need to hire more people."

Hiring has picked up in recent months. The economy added 243,000 net jobs in January, the most in nine months. The unemployment rate dropped for the fifth straight month, to 8.3 percent -- the lowest in nearly three years.

Healthier economic growth is spurring greater job growth. The economy expanded at an annual rate of 3 percent in the final three months of last year.

Most economists expect growth will slow in the current quarter, because companies won't need to rebuild their stockpiles of goods as much as they did last winter. That means less production of goods.

Despite the good news, the job market has a long way to go before it fully recovers from the damage of the Great Recession. Nearly 13 million people remain unemployed, and 8.3 percent unemployment is painfully high.

One reason the unemployment rate has fallen is that many people have given up looking for work. The government only counts people as unemployed if they are actively searching for a job.

This story includes reports from The Associated Press, Reuters and Bloomberg News.