The number of Americans seeking unemployment benefits dropped last week to a seasonally adjusted 346,000,according to a government report released Thursday.

Unemployment-aid applications dropped by 42,000 last week, the Labor Department said Thursday. The steep decline reversed sharp gains over the previous two weeks and brought the level back to a point that signals stronger job growth.

The four-week average, a less volatile measure, rose 3,000 to 358,000. Applications are a proxy for layoffs. Any decline in applications would signal that companies are laying off fewer workers.

Employers added only 88,000 jobs in March after averaging 220,000 the previous four months. The drop in unemployment benefits suggests hiring could pick up again in April.

Economists predict that economic growth accelerated in the January-March quarter to an annual rate of 3%. That would be a vast improvement from the rate of 0.4% in the October-December, which was held by steep defense cuts and slower restocking.

The most recent monthly employment report said employers added only 88,000 jobs in March after averaging 220,000 the previous four months. The drop in unemployment benefits suggests hiring could pick up again in April.