WASHINGTON -- The number of Americans seeking unemployment aid fell last week, matching the lowest level in 42 years, strong evidence that employers remain confident enough in the economy to hold onto their staffs.

The Labor Department says weekly applications for unemployment benefits fell 7,000 to a seasonally adjusted 255,000. Applications last touched that level in July, but before that hadn't been so low since November 1973.

The four-week average of applications, a less volatile measure, dropped to 265,000, the lowest since December 1973.

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There are signs the economy has slowed in recent weeks, in part because the strong dollar has cut into exports and overall hiring has weakened. Americans have also been reluctant to spend. But faltering growth has not yet led businesses to cut jobs.