WASHINGTON (AP) -- The number of people seeking U.S. unemployment benefits fell to a four-year low last week, suggesting employers kept hiring in March at a healthy pace.
Weekly applications dropped 6,000 to a seasonally adjusted 357,000, the Labor Department said Thursday. That's the fewest since April 2008.
The four-week average, a less volatile measure, fell to 361,750, also the lowest in four years.
Applications have been steadily declining since last fall. The four-week average fell 4 percent in the January-March quarter, after dropping 8 percent in the final three months of last year.
When unemployment benefit applications drop consistently below 375,000, it usually signals that hiring is strong enough to lower the unemployment rate.
The downward trend in applications is a promising sign ahead of Friday's report on March job growth. Employers added an average of 245,000 jobs per month from December through February. And the unemployment rate has fallen from 9.1 percent in August to 8.3 percent in February, the lowest in three years.
Economists forecast that employers added 210,000 jobs last month, although they expect the unemployment rate was unchanged for the second straight month.
"We believe that the economy has entered a more self-sustaining phase of the recovery with stronger job creation," said John Ryding, an analyst at RDQ Economics, in a note to clients.
Consumers are growing more confident in the economy and are stepping up spending. Many large retail chains on Thursday reported healthy sales in March.
Gap Inc., Target Corp. and Macy's were among the retailers reporting solid gains. Overall, revenue in stores open at least one year — an indicator of a retailer's health — rose 4.1 percent, according to a preliminary tally of 22 retailers by the International Council of Shopping Centers.
Analysts said a better job market and rising stock prices are encouraging more Americans to shop. Last week the government said consumer spending jumped in February by the most in seven months.
Other data show consumers and businesses are more optimistic about the economy.
The University of Michigan Consumer Sentiment Survey index rose last month to its highest level since February 2011.
The service sector expanded at a healthy pace in March and stepped up hiring, according to a private survey released Wednesday by the Institute for Supply Management. A separate ISM survey of manufacturing companies found that factories also added jobs and boosted production last month.
Companies are investing more, boosting factory output. Businesses ordered more machinery, equipment and other capital goods in February, according to a government report this week.
Yet, greater hiring hasn't led to bigger paychecks. Americans' income grew just 0.2 percent in February, matching January's weak increase. And after taking inflation into account, income after taxes fell for a second straight month. Consumers have boosted their spending by saving less, which economists worry isn't sustainable.
And some companies are still letting workers go. Yahoo said Wednesday that it is cutting 2,000 jobs, or 14 percent of its work force. It is the Internet company's sixth mass layoff in the past four years.
The number of people receiving benefits fell to 7.1 million in the week ended March 17, the latest data available. That's about 100,000 fewer than the previous week. The figure includes about 3.3 million people receiving extended benefits under federal programs put in place during the recession.