Applications for jobless benefits in the U.S. fell sharply for the week ended Jan. 15, after increasing rapidly over the past two consecutive weeks.

Initial jobless claims in the U.S. fell by 37,000 to 404,000 compared with revised figure of 441,000 in the previous week, the Labor Department said on Thursday. Markets had expected the number to fall to 425,000.

Also, the seasonally adjusted four-week moving average of initial claims -- considered as a more accurate measure of employment trends than the weekly number -- decreased by 4,000 to 411,750.

However, the unemployment rate among people eligible for benefits remained unchanged at 3.1 percent for the week ending Jan. 8.

While New York witnessed the largest increase in claims with 24,363 people filing for employment benefits, Oregon saw the largest drop in claims at 5,235.

Overall, the number of people receiving jobless allowance from state and federal governments stood at 9.6 million in the week ended Jan. 1, up 401,237 from the prior week.