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.
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."
The job growth is being driven by a stronger economy, which grew at an annual rate of 3 percent in the final three months of last year.
Other data confirm that the recovery is gaining momentum. Consumers are more confident and have stepped up spending. Auto sales are rising. And the stock market keeps climbing: The Dow Jones industrial average this week hit its highest point since the last day of 2007.
The Federal Reserve is slightly more upbeat about the recovery, largely because of the surge in hiring. After a meeting Tuesday, the Fed said unemployment should continue to decline gradually as the economy expands. And it noted that consumer spending and business investment have picked up.
The central bank took no further steps to aid the recovery and repeated its plan to keep short-term interest rates near zero through 2014.
One concern is that rising gas prices will force consumers to cut back on discretionary spending. That could weigh on economic growth and slow hiring. The Fed said it expects oil and gas prices to temporarily boost inflation but predicted longer-term inflation should remain stable.
The total number of people receiving unemployment benefits is up slightly. More than 7.4 million received aid in the week that ended Feb. 25, the latest period for which figures are available. That's about 36,000 more than in the previous week.
The total includes more than 3 million people who are receiving extended benefits under an emergency program put in place during the recession.
The job market has a long way to go to fully recover from the Great Recession. More than 12.8 million people remain unemployed. And the economy still has 5 million fewer jobs than before the downturn.
But the more robust job market has caused many so-called "discouraged workers" who had stopped looking for jobs to start looking again. The work force surged by 476,000 in February and by nearly 750,000 in the past two months.