More people filed unemployment claims than expected last week. In the week ending May 17, 326,000 unemployment claims were made, up from the 310,000 expected.

Figures in Washington showed only 298,000 claims the week before. That figure was a seven-year low.

While more people are applying for unemployment for the first time, continuing claims are falling to their lowest since 2007. 

The drop of the continuining claims shows an improving labor market. 

The four-week average for unemployment claims also fell. This is a more stable number for claims to be measured. Last week, the four-week average was 323,500; this week, it fell to 322,500.

In April, U.S. payrolls gained 288,000 workers, the highest gain since 2012, and the unemployment rate dropped to 6.3 percent. Economists expect an average gain of 200,000 for the rest of the year.

Hiring was unusually strong in April and it is expected to fall for May.

Economists say the number of weekly unemployment claims of 350,000 indicates moderate job growth. So far this year unemployment claims have been far below that number.

With more Americans returning to work, sales at home improvement store Lowe's rose. The company reported first-quarter profits that exceeded analysts' estimates.

Federal Reserve chairwoman Janet Yellen cautions that the labor market still has some work to do before it can be considered a healthy market again.

"Although we have come far, it is also true that we have further to go to achieve a healthy economy," Yellen said last week.

But another economist tells Americans not to worry.

"Don't be disappointed," Ian Shepherdson, chief economist at Pantheon Macroeconomics, said in a research note. "The trend is downwards, signaling faster payroll growth." 

Economists are expecting more employees will be getting paychecks, which means they will be spending more money. They predict more growth for the economy thanks to more spending.