The number of workers filing new applications for unemployment insurance fell slightly more than expected last week, offering hope the fragile economic recovery remained intact.
Initial claims for state unemployment benefits dropped 19,000 to a seasonally adjusted 457,000 in the week ended June 19, the Labor Department said on Thursday. The decline in claims was the largest since the week ended April 17.
Analysts polled by Reuters had expected claims to fall to 460,000 from the previously reported 472,000, which was revised up to 476,000 in Thursday's report.
A Labor Department official described the report as fairly straight forward and said the prior week's claims had been pushed up by technical factors.
The four-week moving average of new claims, considered a better measure of underlying labor market trends, fell 1,500 to 462,750.
Claims continue to be stuck at stubbornly high levels, implying unemployment will stay elevated for a while. Businesses are cautious about hiring, nervously watching the economy's recovery from the longest and deepest recession since the 1930s, which is showing signs of moderating.
On Wednesday, the Federal Reserve said the labor market was gradually improving, but noted that employers remained reluctant to add employees. The U.S. central bank left overnight lending rates in a zero to 0.25 percent range and renewed its ultra low interest rate pledge.
A near 10 percent unemployment rate is weighing on President Barack Obama's popularity, and unhappiness with the economy could prove costly to the Democratic Party in November's congressional elections, with voters in an anti-incumbent and anti-Washington mood.
The number of people still receiving benefits after an initial week of aid fell 45,000 to 4.55 million in the week ended June 12, the Labor Department said. The level was in line with market expectations for 4.56 million.
The insured unemployment rate, which measures the percentage of the insured labor force that is jobless, slipped to 3.5 percent in the June 12 week from 3.6 percent.
(Reporting by Lucia Mutikani; Editing by Neil Stempleman)