WASHINGTON (AP) — Fewer people sought U.S. unemployment benefits last week, adding to signs that the job market is strengthening.
And in another reassuring sign for the economy, wholesale inflation remains mild outside of higher gas prices.
Applications for unemployment aid dropped 14,000 to a seasonally adjusted 351,000, the Labor Department said Thursday. That matches a four-year low reached last month. The four-week average, which smooths fluctuations, was unchanged at 355,750.
Applications have leveled off in the past few weeks after falling for six months. The average has declined 14 percent since October.
When applications drop consistently below 375,000, it usually signals that hiring is strong enough to lower the unemployment rate.
What Your Peers Are Reading
The steady decline in applications has coincided with the best three months of hiring in two years. From December through February, employers added an average of 245,000 jobs a month. The unemployment rate has declined to 8.3 percent, the lowest in three years.
The figures “indicate that the labor market is steadily, if slowly, improving,” said Steven Wood, an economist at Insight Economics. “Another month of 200,000-plus payroll employment in March is likely.”
A separate Labor report said higher gas costs drove U.S. wholesale prices up last month. But excluding the big jump in gas, inflation was mostly tame.
The Labor Department said Thursday that the producer price index rose 0.4 percent in February. The so-called “core” index, which excludes food and gas prices, increased 0.2 percent.
In the past twelve months, wholesale prices have increased 3.3 percent. That’s the smallest year-over-year gain since August 2010. Low inflation allows the Federal Reserve to keep short-term interest rates near zero.
The report “suggests that inflationary pressures are still contained,” Paul Ashworth, an economist at Capital Economics, said in a note to clients. “More evidence that the U.S. economy could finally be on the right track.”