New U.S. claims for unemployment benefits fell slightly more than expected last week, offering a ray of hope for the anemic labor market recovery.

Initial claims for state unemployment aid dropped 11,000 to 457,000, the Labor Department said on Thursday.

Analysts polled by Reuters had forecast claims slipping to 459,000 from the previously reported 464,000 the prior week, which was revised slightly up to 468,000 in Thursday's report.

The four-week average of new jobless claims, seen as a better measure of underlying labor market trends, fell 4,500 to 452,500.

It is certainly a relief to see a decline in the number of Americans filing for unemployment insurance for the first time, Jennifer Lee, senior economist at BMO Capital Markets, said in a research


Although that takes some of the sting out of the prior week's upwardly revised jump of 41,000, the level is still too high for anyone's liking.

U.S. stock index futures added to gains on the report, while U.S. Treasury debt prices were little changed. The U.S. dollar was steady.

A Labor Department official described the report as fairly straight forward.

Jobless claims have not fallen much this year and remain above levels that analysts say are consistent with sustained jobs growth.

Sluggish jobs growth remains the biggest obstacle to the economy's recovery from its longest and deepest recession since the 1930s, which showed signs of slowing down in the last couple of months.


With unemployment high, consumer spending has been tepid and home foreclosures remain elevated as people find it hard to pay their mortgages.

Foreclosures rose in three of every four large U.S. metro areas in the first half of this year, likely ruling out sustained home price gains until 2013, real estate data company RealtyTrac said on Thursday.

Unemployment was the main culprit driving foreclosure actions on more than 1.6 million properties, the company said.

The government is expected to report on Friday that growth slowed to a 2.5 percent annual rate in the April-June period from a 2.7 percent pace in the first three months of the year.

In the week ended July 17, 4.57 million people were still receiving benefits after an initial week of aid, up 81,000 from the prior week. The continuing claims data covered the survey period for the government's July household survey from which the national unemployment rate is derived.

Analysts polled by Reuters had forecast so-called continuing claims increasing to 4.55 million.

The insured unemployment rate, which measures the percentage of the insured labor force that is jobless, edged up to 3.6 percent in the week ended July 17 from 3.5 percent the prior week.

The number of people on emergency unemployment benefits fell to 3.3 million in the week ended July 10.

But that number is set to rise after benefits were restored last week to about 2.5 million unemployed Americans after Congress ended an impasse on how to cover the $34 billion cost of extending aid through November.

The benefits had lapsed in May. In normal times, benefits expire after 26 weeks, but the severity of the recession prompted Congress to expand the program to cover up to 99 weeks of benefits.

(Reporting by Lucia Mutikani; Additional reporting by Lynn Adler in New York; Editing by Andrea Ricci)