By CHRISTOPHER S. RUGABERWASHINGTON (AP) â¿¿ The number of Americans seeking unemployment benefits fell sharply last week to a seasonally adjusted 346,000, signaling that the job market might be stronger than March's weak month of hiring suggested. Applications for unemployment aid dropped 42,000 last week, the Labor Department said Thursday. The decline nearly reversed an increase over the previous three weeks. The four-week average, a less volatile measure, rose 3,000 to 358,000. The number of unemployment applications has been volatile in the past two weeks largely because of the Easter holiday, a department spokesman said. The timing of the holiday changes from year to year. That makes it hard to adjust for school holidays and other changes that can cause temporary layoffs. Applications had risen two weeks ago to 388,000, the highest level in four months. That spike "appears to have been a false alarm," Jim O'Sullivan, chief U.S. economist at High Frequency Economics, said in a note to clients. "The report should assuage some of the concerns raised by last week's weaker-than-expected data, particularly payrolls." Employers added only 88,000 jobs in March, the government said last week. That followed four months in which job growth averaged 220,000. Last week's drop in applications for unemployment aid could signal that hiring is picking up in April. O'Sullivan noted that the average is near its level for the first three months of the year, when job gains averaged 168,000 a month. In March, the unemployment rate fell to a four-year low of 7.6 percent last month, down from 7.7 percent. But the rate fell only because more people stopped looking for work and were no longer counted as unemployed. Applications are a proxy for layoffs. The decline in applications signals that companies are laying off fewer workers. Nearly 5.28 million people were receiving unemployment aid in the week that ended March 23, the latest period for which figures are available. That's about 10,000 fewer than in the previous week.