APPLICATIONS for unemployment benefits fell last week for the fourth time in five weeks, a sign that layoffs are declining.

The Labour Department said yesterday that initial claims for jobless aid dropped by 11,000 to a seasonally adjusted 445,000. It’s the lowest level since the week ending July 10 and down from 504,000 initial claims in mid-August — the high point for the year.

Economists were mildly encouraged by the drop. But they also pointed out that claims remain at an elevated level consistent with weak job growth. Employers aren’t hiring enough to bring down the 9.6 per cent unemployment rate.

“While it’s comforting to see claims grinding lower, the fact is that they remain at levels that suggest continued sub-par job growth,” Sal Guatieri, an economist at BMO Capital Markets, wrote in a note to clients.

In a separate report, the department said job openings rose in August for the second straight month to 3.2 million. Private sector openings increased to their highest level in 21 months. That could bode well for future hiring.

The department’s Job Openings and Labor Turnover survey also said that private-sector layoffs plummeted to 1.6 million in August, the lowest monthly total in more than four years.

The stock markets were mixed after the release of the reports. The Dow Jones industrial average dipped 17 points, while the Nasdaq edged up.

Weekly unemployment applications have rarely fallen below 450,000 this year, and never for longer than two weeks. Economists say a sustained drop below 425,000 would signal employers are stepping up hiring.

The four-week average of new claims, a less volatile measure, dropped to 455,750, the sixth straight decline.

Separately, retailers reported surprisingly strong sales gains for September due to healthy back-to-school shopping. The results raised hopes for a positive holiday shopping season.

Numerous chains reported better-than-expected results, including Macy’s Inc, Victoria’s Secret and Bath and Body Works parent Limited Brands Inc and Abercrombie & Fitch.

The claims report, while volatile, is considered a real-time snapshot of the job market. It is also a measure of the pace of layoffs and an indication of companies’ willingness to hire.

Claims have fallen sharply since June 2009, the month the recession ended. They topped 600,000 at the end of that month.

But the improvement has largely stalled this year. Initial claims have generally fluctuated around 450,000 since January. Any sustained decline below that level would be a positive sign that the job market is improving.

The report comes a day before the government is scheduled to release its monthly jobs report for September. Private companies are forecast to have added a net total of 75,000 jobs last month. But that’s likely to be offset by the loss of 75,000 temporary census jobs. Overall, economists expect no change in total payrolls, according to a survey by Thomson Reuters.

The unemployment rate is projected to rise to 9.7 per cent from 9.6 per cent, as more people enter the labour market searching for work.