The number of U.S. workers filing new claims for jobless benefits dropped more sharply-than-expected last week, a government report showed on Thursday, boosting views that the labor market and the economy were stabilizing.

Initial claims for state unemployment insurance benefits fell 38,000 to a seasonally adjusted 550,000 in the week ended August 1 from 588,000 the prior week, the Labor Department said.

A Labor Department official described the period under review as uneventful and said it appeared the distortions to the weekly data caused by the auto plant closures were out of the way. Analysts polled by Reuters had forecast new claims to edge down to 580,000 last week from a previously reported 584,000 count.

However, the number of people collecting long-term unemployment benefits rose by 69,000 to 6.31 million in the week ended July 25, the latest week for which the data is available. The so-called continuing claims had declined for three straight weeks. The insured unemployment rate was unchanged at 4.7 percent for the fourth straight week.

In a sign that the trend was toward a moderation in the pace of layoffs, the four-week moving average for new claims fell 4,750 to 555,250 in the week ended August 1. The four-week moving average is considered a better gauge of underlying trends as it irons out week-to-week volatility. The moving average has declined for six consecutive weeks.

(Reporting by Lucia Mutikani; Editing by Andrea Ricci)