The number of Americans seeking unemployment benefits remained near the lowest level in more than five years last week, a sign that companies are cutting few jobs.

The number of Americans applying for unemployment benefits rose last week after reaching the lowest level in 5 years. But the broader trend suggests companies are laying off fewer workers and could step up hiring in the months ahead.

Unemployment rates rose in more than half of U.S. states in July and fewer states added jobs, echoing national data that show the job market may have lost some momentum.

The number of Americans seeking unemployment benefits dropped 15,000 last week to a seasonally adjusted 320,000, the fewest since October 2007 a sign of dwindling layoffs and steady if modest job growth.

U.S. employers added 162,000 jobs in July, a modest increase and the fewest since March. Still, the unemployment rate fell to a 4-year low of 7.4 percent, a hopeful sign in an otherwise lackluster report.

Though growth remains weak, the pickup last quarter supports forecasts that the economy will accelerate the rest of the year.

Companies are increasingly confident the economy will grow at a modest pace over the next year and are hiring more, according to a survey of business economists.

The drop left unemployment benefit applications at the lowest level in 10 weeks, the Labor Department said.