Weekly applications for unemployment aid rose 23,000 to a seasonally adjusted 302,000, the Labor Department said Thursday. The prior week's claims were revised down to 279,000, the lowest since May 2000.
The four-week average, a less volatile measure, fell 3,500 to 297,250. That's the lowest average since April 2006, more than a year before the Great Recession began at the end of 2007.
Applications are a proxy for layoffs. When employers keep their workers, it suggests potential income gains, active hiring and confidence that the economy is growing.
"The claims data continue to signal an improving labor market," said Jim O'Sullivan, chief U.S. economist at High Frequency Economics, in a client note.
Employers added 288,000 jobs in June, the fifth straight month of job gains above 200,000. That's the first such stretch since 1999, during the height of the dot-com boom. The unemployment rate fell to 6.1 percent, the lowest since September 2008.
Economists forecast that the July employment report being released Friday will show that 225,000 jobs were added, according to a survey by the data firm FactSet. They forecast that the unemployment rate held at 6.1 percent in July.
Payroll provider ADP said Wednesday that private employers added 218,000 jobs in July, down from 281,000 in June.
Steady hiring gains have yet to lift wages by much. Wage growth has slightly outpaced inflation since the recession ended more than five years ago.
But more people with jobs increases the total number of paychecks, which could boost consumer spending and growth.