WASHINGTON — The number of people seeking unemployment benefits fell last week below 400,000 for the first time in four months, a sign that the job market may be improving slowly after a recent slump.
Applications for unemployment aid dropped by 7,000 to a seasonally adjusted 395,000, the Labor Department said Thursday. Applications had been above 400,000 for the previous 17 weeks.
The four-week average, a less-volatile figure, fell to 405,000, its sixth straight decline and the lowest level since mid-April. That suggests layoffs have eased.
The decline in applications helped lift stocks. The Dow Jones industrial average rose more than 85 points in the first hour of trading.
Applications fell in February to 375,000, a level that reflects healthy job growth. They soared to an eight-month high of 478,000 in late April, and have declined slowly since then.
There were fewer layoffs last week in the manufacturing, transportation and service industries, according to the report. Only nine states reported an increase in applications.
Paul Dales, senior U.S. economist at Capital Economics said the decline shows the job market is at least not getting worse.
"Of course, it tells us nothing about hiring, which the market turmoil of recent weeks will not have helped," said Dales, noting the 16 percent decline in the Dow Jones industrial average since July 21.
The economy added 117,000 net jobs in July, the government said last week. That was an improvement from the previous two months. But it's far below the average of 215,000 jobs per month that companies created from February through April.
Many employers pulled back on hiring after signs emerged that the economy had weakened from last year. High gas prices and scant wage gains left consumers with less money to spend on discretionary purchases, such as appliances, furniture and electronics. Supply chain disruptions caused by the Japan crisis also dampened U.S. factory production.