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The number of Utahns filing new claims for unemployment benefits dropped last week to 1,786, the lowest since the end of September 2008.

That total was 166 fewer than the week before and lowered the less-volatile four-week average to 1,988, which is as low as that number has been since mid-October 2008, the Utah Department of Workforce Services said Thursday.

Utah's initial filings for jobless benefits have declined in 11 of the past 13 weeks after spiking in early January to 5,139, reflecting the layoff of workers who had been hired for the Christmas sales season. A year ago, 2,531 Utahns submitted new claims for unemployment insurance.

Around the country, the U.S. Labor Department said Thursday, the number of people seeking benefits dropped 10,000, to 382,000. That's the third drop in four weeks. The four-week average fell to 389,500, just 1,000 above a two-year low that was reached three weeks ago.

Nationally, applications near 375,000 are consistent with a sustained increase in hiring. Applications, which reflect the pace of layoffs, peaked during the recession at 659,000 (5,205 in Utah, in mid-January, 2009).

The number of Americans seeking benefits has fallen for several months. The four-week average has dropped by 28,750, or nearly 7 percent, in the past eight weeks. At the same time, companies are adding more employees.

Employers nationally added a net total of 216,000 jobs last month, the Labor Department said last week, and the unemployment rate fell from 8.9 percent to 8.8 percent. Private employers added more than 200,000 jobs in both February and March, the biggest two-month gain since 2006.

Utah's unemployment rate rose slightly, to 7.7 percent, in February, the last month for which state figures are available, although the state's economy was supporting 18,000 more jobs than it had a year earlier.

More hiring is needed to bring down the unemployment rate at a faster pace. The economy still has 7.2 million fewer jobs than it did when the recession began in December 2007.

Many companies are increasing employment this year. McDonald's Corp. said earlier this week that it will hold its first national hiring day April 19 as part of its efforts to fill 50,000 job openings.

"Businesses are hiring, perhaps not at lightning speed, but they are hiring," Jennifer Lee, an economist at BMO Capital Markets, said. "And the jobless rate is inching lower. We're nowhere near 'normal,' but we're taking steps in the right direction."

Still, the number of applications could move higher in the coming weeks, both nationally and in Utah.

In the Beehive State, Alliant Techsystems Inc. announced Tuesday that it was laying off 134 employees as the space shuttle program comes to an end and NASA moves away from developing a launching system for manned trips to the moon and Mars, projects on which the aerospace company was working.

Nationally, Toyota Motor Corp. has said it may temporarily shut down its North American plants later this month. That's because of a shortage of parts from Japan, where the earthquake and tsunami have disrupted production. Other auto companies also may suspend production, which could cause temporary layoffs and a spike in applications for unemployment benefits.

Unemployment benefits will continue to be paid in the event of a federal government shutdown, a Labor Department spokesman said. Benefit programs are administered by the states. If federal employees are temporarily laid off, they will apply for benefits from a separate program, the spokesman said.

The number of people nationally collecting benefits has also dropped. The total dipped slightly, to 3.7 million, during the week ending March 19, one week behind the applications data. That's the lowest total since October 2008. But that doesn't include millions of people receiving aid under the emergency unemployment benefit programs put in place during the recession.

Overall, 8.5 million people received unemployment benefits in the week ending March 19, the latest data available. That's down sharply from the previous week, when nearly 8.8 million people collected benefits.