U.S. initial claims for unemployment benefits dropped last week, for the third consecutive week, pushing jobless claims to the lowest level in more than three years.

The Labor Department said today that the number of laid-off workers seeking jobless benefits fell by 6,000 last week to 336,000, a level that was last seen the week of Jan. 13, 2001.

The third straight weekly decline in jobless benefits has raised hopes that U.S. business may begin rehiring laid-off workers.

The lack of significant new hiring has become a key issue in the current U.S. presidential race.

In a separate release, Labor said inflation at the wholesale level jumped by 0.6% in January, the biggest increase in three months.

The rise in the Producer Price Index reflected in part the largest jump in energy prices since last March at the start of the Iraq war. Outside of the volatile food and energy categories, the PPI rose a more moderate 0.3%.

The January increase followed a much more moderate 0.2% increase in December and was the sharpest jump since a 07% rise in October.

BMO Nesbitt Burns says that, “The long-delayed U.S. producer price index reading of 0.6% for January was chock full of bad news, unless higher inflation is actually good news these days.”

“The upward trend in pipeline inflation is intensifying,” confirms RBC Financial. “Excluding volatile food and energy prices, producer price inflation at all three stages of production rose in January.” It adds that sharper increases in finished product prices are likely in the coming months.