Published: Mar 31, 2011 5:59 PM EDT
Updated: Mar 31, 2011 2:59 PM EDT

WASHINGTON - Fewer people applied for unemployment benefits last week, a sign that layoffs are dropping and companies may be stepping up hiring.

The Labor Department says the number of people seeking benefits dipped by 6,000 to a seasonally adjusted 388,000 for the week that ended March 26. That's the second decline in three weeks.

Applications near 375,000 or below are consistent with a sustained increase in hiring. Applications peaked during the recession at 659,000.

The four-week average of applications, a less volatile measure, rose to 394,250. Still, that figure has dropped by 35,500, or 8 percent, in the past two months.

The department also revised the previous five years of data. The changes showed that applications in recent weeks were moderately higher than previously reported.

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