Applications for unemployment benefits dropped last week to thelowest level in four years, reinforcing signs the U.S. labor marketis picking up.

Jobless claims decreased by 5,000 to 348,000 in the week endedMarch 17, the fewest since February 2008, Labor Department figuresshowed today in Washington. The median forecast of 46 economists ina Bloomberg News survey projected 350,000. The number of people onunemployment benefit rolls and those getting extended payments alsofell.

Dismissals have been waning and reports show companies arebecoming more willing to expand workforces amid evidence sales areimproving. Employment growth will help spur consumer spending,which accounts for about 70 percent of the economy.

“This is consistent with gradual improvement in labor marketconditions,” said Brian Jones, a senior U.S. economist at SocieteGenerale in New York, who correctly projected the level of claims.“It's good for consumer spending.”

Stock-index futures held earlier losses on concern the globaleconomy was cooling as manufacturing in China and Europe slowed.The contract on the Standard & Poor's 500 Index maturing inJune fell 0.5 percent to 1,390.6 at 8:42 a.m. in New York.

Estimates in the Bloomberg survey ranged from 345,000 to370,000. The Labor Department revised the previous week's figure upto 353,000 from an initially reported 351,000.

There was nothing unusual in last week's data, a LaborDepartment spokesman said.

Last week included the 12th of the month, which coincides withthe period the Labor Department surveys employers to calculatemonthly payroll growth. The March employment report will bereleased on April 6.

The four-week moving average, a less volatile measure than theweekly figures, declined to 355,000 last week from 356,250. Theaverage during last month's survey week was 359,500, indicating thejob market may have continued to improve.

The number of people continuing to receive jobless benefits fellby 9,000 in the week ended March 10 to 3.35 million.

The continuing claims figure does not include the number ofAmericans receiving extended benefits under federal programs.

Those who've used up their traditional benefits and are nowcollecting emergency and extended payments decreased by about16,000 to 3.31 million in the week ended March 3.

Jobless Rate

The unemployment rate among people eligible for benefits, whichtends to track the jobless rate, dropped to 2.6 percent, the lowestlevel since September 2008, from 2.7 percent in the prior week,today's report showed.

Thirty-eight states and territories reported a decline inclaims, while 15 reported an increase. These data are reported witha one-week lag.

Initial jobless claims reflect weekly firings and tend to fallas job growth — measured by the monthly non-farm payrolls report —accelerates.

Companies expanding their workforce include General Electric Co.The Fairfield, Connecticut-based company this week said it will add600 jobs at a new Louisville, Kentucky, appliance plant producingrefrigerators with freezers built into the bottom.

Federal Reserve policy makers are weighing whether the stimulusthat helped fuel the best six-month streak of job growth since 2006is sufficient for meeting the central bank's goal of fullemployment. Joblessness has fallen to 8.3 percent, the lowest inthree years.

Central bankers, meeting last week, reiterated that conditionswould probably warrant “exceptionally low” interest rates at leastthrough late 2014.

“Labor market conditions have improved further, the unemploymentrate has declined notably in recent months but remains elevated,”the central bank said in a statement.

Bloomberg News