NEW YORK (CNNMoney.com) -- The number of Americans filing for initial unemployment insurance dropped to the lowest level in nearly two years last week, according to a government report released Thursday.
There were 429,000 initial jobless claims filed in the week ended July 10, the lowest level since Aug. 23 2008 and down 29,000 from a revised 458,000 in the previous week, the Labor Department said.
The number of claims was much lower than expected. A consensus estimate of economists surveyed by Briefing.com expected 450,000 claims.
"We've been waiting for the day that this number creeps toward 400,000, and it looks like that's finally where we're headed," said Craig Thomas, senior economist at PNC Financial Services.
"We've come a long way from the peaks of last year, and while we stalled out at the beginning of this year, it looks like now we're creating jobs at a pace that will actually put a dent in the unemployment rate," he added.
The 4-week moving average of initial claims, which is calculated to smooth out volatility, was 455,250, down 11,750 from the previous week's revised average of 467,000.
Continuing claims: The number of people filing continuing claims rose to 4,681,000 in the week ended July 3, the most recent data available. That was up 247,000 from the preceding week's revised 4,434,000 claims.
Economists surveyed by Briefing.com expected ongoing claims to edge lower to 4,400,000 from the unrevised 4,413,000 in the previous week.
The 4-week moving average for ongoing claims rose by 22,000 to 4,581,250 from the preceding week's revised 4,559,250.
But Thomas said the increase in continuing claims should be taken with a grain of salt.
"Continuing claims really haven't been range-bound in the way that initial claims have been, and it's fairly clear that in the long run, continuing claims are on a downward slope," said Thomas. "We got a one week jump upward, but it looks like just a blip, and not enough of a blip to suggest anything other than statistical noise."
Outlook: Thomas said he expects claims to continue to fall as the economy recovers and more jobs are created.
"We have some problems to work through in the near term, like fewer home sales," said Thomas. "But in the longer term, inventories are very lean and productivity is slowing, indicating that companies are needing workers."
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