The Labor Department said that weekly applications for unemployment benefits dropped 13,000 to a seasonally adjusted 348,000. It was the fourth drop in five weeks and the fewest number of claims since March 2008.

The four-week average, which smoothes out fluctuations in the weekly data, fell for the fifth consecutive week to 365,250. The average has fallen nearly 13 percent in the past year.

The consistent decline indicates that companies are laying off fewer workers, and that hiring is picking up. When applications drop consistently below 375,000, it usually signals that hiring is strong enough to lower the unemployment rate.