WASHINGTON (AP) — The number of people claiming unemployment benefits for the first time barely rose last week, after two weeks of sharp drops, further evidence that layoffs are easing.

The Labor Department said Thursday that first-time claims for jobless benefits rose by 1,000 to a seasonally adjusted 434,000 last week. That’s lower than the 447,000 that analysts expected, according to Thomson Reuters.

The four-week average of claims, which smooths fluctuations, fell for the 18th straight week to 450,250. That figure is nearing the roughly 425,000 that many economists say would be a sign the economy will start creating jobs.

Economists are closely watching initial claims, which are considered a gauge of the pace of layoffs and an indication of companies’ willingness to hire new workers. As the economy slowly recovers from the worst recession since the 1930s, more hiring is critical to boosting workers’ incomes and providing the fuel for increasing consumer spending and further economic growth.

The number of continuing claims dropped 179,000 to 4.8 million, the department said. But that figure doesn’t include an additional 5.4 million people receiving unemployment under federal emergency programs, as of the week ending Dec. 19, the latest data available.

A total of 10.5 million people were receiving unemployment benefits that week, an increase of about 300,000 from the previous week. That increase is partly a result of a decision by Congress in November to extend benefits for a fourth time since the recession began. Jobless workers can now receive up to 73 weeks of benefits, paid for by the federal government, on top of the 26 weeks customarily provided by the states.

The large number of people continuing to receive benefits indicates that even as layoffs are declining, hiring hasn’t picked up. That leaves people out of work for longer and longer periods of time.

The Labor Department will issue a more comprehensive snapshot of the job market on Friday, when it releases the monthly jobs report for December. Economists forecast the unemployment rate will rise to 10.1 percent from 10 percent and employers will have shed 8,000 jobs.

Still, the sharp drop in first-time unemployment claims in recent months as well as other signs of improvement have caused some economists to predict small job gains in December. If so, that would be the first net increase in jobs in two years.

Initial claims have dropped by 100,000, or 19 percent, since late October.

Some employers are continuing to lay off workers: Defense contractor Lockheed Martin Corp. said Wednesday that it is cutting 1,200 workers, or less than 1 percent of its work force, as it combines two electronics systems businesses to save costs. Alcoa Inc. said it will cut 145 jobs at a plant in Indiana.

Among the states, Pennsylvania reported the largest increase in claims, with 9,653, which it attributed to layoffs in the construction, food and transportation industries. Kentucky, Indiana, Kansas and Ohio had the next largest increases. State data lags the initial claims data by one week.

California reported the largest drop in claims, with 23,160, which it attributed to a holiday-shortened work week and fewer layoffs in the construction and service industries. Texas, Georgia, Florida and North Carolina had the next largest decreases.