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WASHINGTON (AP) — The number of people seeking U.S. unemployment benefits fell sharply last week, a sign that strong hiring will likely continue.

Weekly applications for unemployment aid dropped 36,000 to a seasonally adjusted 289,000, the Labor Department said Thursday. The drop nearly reversed a large increase from last month, which likely occurred because of cold weather and snowstorms.

The four-week average, a less volatile measure, fell 3,750 to 302,250. The average has dropped nearly 9 percent in the past year.

Applications are a proxy for layoffs. The decline indicates companies are confident enough to hold onto their staffs and hire more workers.

Weekly applications had risen by 40,000 last month. Economists blamed most of that rise on harsh winter weather that closed schools and shut down construction sites, causing temporary layoffs.

The economy has faltered a bit in recent months, growing much more slowly than the 4.8 percent annual rate that it reached last spring and summer. Growth was just 2.2 percent in final three months of last year, and many economists expect similarly modest growth in the first three months of this year.

Still, employers added an average of 288,000 jobs a month from December through February, a strong pace that has lowered the unemployment rate to 5.5 percent. That suggests employers see the slowdown as temporary.

Nearly 3.3 million more Americans are earning paychecks compared with 12 months ago. That should boost spending and economic growth for the rest of this year.

The strong job gains have yet to translate into higher pay. Average hourly earnings rose 2 percent in February from a year earlier, down from a 2.2 percent annual gain in the previous month.

Paychecks could pick up soon, however. More Americans are quitting their jobs, a report Tuesday showed, meaning that more are moving on to better, usually higher paying positions. That can force employers to pay more to attract and keep workers.

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