Applications for unemployment benefits dropped last week to the second-lowest level this year, evidence that companies are cutting fewer jobs.
The Labor Department says first-time claims for jobless aid fell by 17,000 to a seasonally-adjusted 421,000 in the week ending Dec. 4.
Wall Street analysts had expected a smaller decline.
The four-week average of claims, a less volatile measure, dropped for the fifth straight week to 427,500.
That's the lowest since August 2008, just before the financial crisis intensified with the collapse of Lehman Brothers.
Claims have fallen steadily in the past two months, raising hopes that companies will soon accelerate hiring.
Applications dropped to 410,000 two weeks ago, their lowest point in more than two years.
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