The labor market is showing sustained signs of improvement as the four-week average of layoffs dropped to its lowest level since March 2008.
Weekly applications fell by 12,000 to a seasonally adjusted 350,000 for the week that ended Dec. 22, while the four-week moving average, a better indication of the direction of the job market, fell to 356,750, close to a five-year low, the Labor Department reported on Thursday.
The December jobs report is due out next week and could likely fall in line with last month's figures of around 150,000 jobs added, around the average number of jobs added each month this year.
The Christmas holiday could be distorting data after weeks of of skewed figures caused by Hurricane Sandy, although the monthly average has been steadily improving this year.
However, a Labor Department spokesman said those estimates are usually "fairly accurate." Five states also did not provide figures, so the Labor Department provided estimates for those missing figures, according to news reports.
Hiring needs to pick up to lower the unemployment rate, which stands at 7.7 percent. The jobless rate dropped from 7.9 percent in November, but that was mostly because more workers looked for jobs.
Business leaders have been pushing lawmakers to work together to solve looming tax and spending issues expected to go into effect next week, arging that a "fiscal cliff" agreement would spur more hiring and investment heading into 2013.
But Congress and the White House remain at an impasse with time running out.
President Obama returned from Hawaii on Thursday morning, shortly after the Senate gaveled back into session with pressure rising to reach a deal before the new year.
The president has spoken to all four congressional leaders about working toward a deal.
In addition to the fiscal cliff tax and spending issues, those out of work for six months or more are facing the loss of their jobless benefits with the program set to expire on Saturday — affecting about 2.1 million people.
House Democrats and Obama administration have said a one-year extension of the federal benefits program must be included in any year-end deal.
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