Reuters/Washington

A gauge of the trend in layoffs of American workers fell last week to its lowest since before the 2007-09 recession, a hopeful sign for the US economy.
The four-week average of new claims for state jobless benefits dropped to 335,500, the Labor Department said yesterday. The reading has not been that low since November 2007, just before the US fell into a calamitous recession.
Now it appears that a long cycle of aggressive layoffs, which had fuelled a surge in unemployment and helped shape two presidential elections, is over.
Still, employers have appeared reticent to hire, and Thursday’s data still pointed to only modest economic growth. Last week, initial jobless claims edged 5,000 higher to 333,000, a little less than expected.
“The overall economy and the labour market are improving at a moderate pace,” said Lindsey Piegza, chief economist at brokerage Sterne Agee & Leach in Chicago.
The pull-back in layoffs since 2009 has helped bring about a substantial fall in the jobless rate, and the trend in jobless claims could make the Federal Reserve more comfortable in unwinding the nation’s last giant economic stimulus programme.
 Many economists expect the US central bank to begin reducing its massive bond-buying stimulus programme as soon as next month. The Fed currently buys $85bn a month in bonds to push borrowing costs lower and help boost economic recovery.
While layoffs are roughly half their level in early 2009, the recovery in job creation has been more lacklustre.
Employers added just 162,000 workers to payrolls in July. Economic growth has also trended lower in recent months, with national output growing at a mere 1.4% annual rate in the first half of the year, down from 2.5% in the same period of 2012.
“The potential for job creation to meaningfully accelerate is limited,” said Jim Baird, an investment officer at Plante Moran Financial Advisors in Kalamazoo, Michigan.
New jobless claims were volatile in July due to regular summer auto plant shutdowns, which make it hard for the government to adjust the data for seasonal swings.