Applications for U.S. state unemployment insurance fell to a fresh pandemic low last week as business confidence strengthens and employers seek to fill more positions left open by restrictions.

Initial claims in regular state programs declined by 34,000 to 473,000 in the week ended May 8, Labor Department data showed Thursday. The median estimate in a Bloomberg survey of economists called for 490,000 claims. The prior week’s figure was revised up to 507,000.

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The labor market continues to improve as more Americans get vaccinated and consumer demand picks up, helping spur economic activity. As more businesses and states lift remaining pandemic restrictions, hiring is expected to continue to accelerate.

Claims data have been volatile during the pandemic amid backlogs, fraud and new programs. Also, several states including South Carolina and Montana have recently said they plan to pull out of federal unemployment benefit programs amid a debate about whether generous aid is playing a role in why businesses are having a hard time hiring workers.

Michigan and New York led among states with the biggest declines last week.

Continuing claims for ongoing state benefits fell slightly in the week ended May 1. Initial applications for Pandemic Unemployment Assistance for self-employed and gig workers ticked up last week.