The number of Americans seeking unemployment benefits slipped 1,000 last week to a seasonally adjusted 298,000, a low level that signals employers are cutting few jobs and hiring is likely to remain strong.
The Labor Department says the four-week average, a less volatile measure, dropped to 299,750. That's just 6,000 higher than four weeks ago, when the average fell to the lowest level in more than eight years.
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Applications are a proxy for layoffs. When employers hold onto their workers, it suggests they are more confident in the economy and could step up hiring.
The applications data is the latest sign that the job market is steadily healing. Employers have added an average of 230,000 jobs a month this year, up from an average of 195,000 in 2013. Average job gains since February have been the best in eight years.
The unemployment rate ticked up to 6.2 percent in July from 6.1 percent in June. But that was because more Americans began looking for work. Most didn't immediately find jobs, but the rising number of job seekers suggests that people are growing more confident about their prospects.
And employers in June advertised the most monthly job openings in more than 13 years, the government said earlier this month.
A total of 2.5 million people received benefits in the week ending Aug. 16, the latest data available, up 25,000 from the previous week. But that figure has fallen from nearly 3 million a year ago.
Rising optimism about jobs and hiring helped boost consumer confidence to nearly a seven-year high in August, the Conference Board, a research group, said earlier this week.
The percentage of respondents who said jobs were "plentiful" rose to 18.2 percent from 15.6 percent in July. That's the highest level since 2008. Consumer perceptions generally track the unemployment rate over time.
But hiring has yet to boost wages by much. Wage growth has barely outpaced inflation since the recession ended more than five years ago. Still, more people with jobs means more paychecks, which could drive consumer spending and growth.