NEW YORK (CNN/Money) - New jobless claims fell in the United States last week, the government said Thursday, though their level still indicated weakness in the labor market following the economy's first recession in a decade.

The number of Americans filing new claims for unemployment benefits fell to 418,000 in the week ended April 27 from a revised 428,000 the prior week, the Labor Department reported. It was the fifth straight week that claims were above 400,000, a level pointing to a sluggish job market.

Economists surveyed by Briefing.com had expected 410,000 new claims. The report will be followed Friday by the department's reading on unemployment and job creation for April.

It's still unclear how many of last week's new claims were actually workers re-filing for benefits after Congress allowed an extension of benefits in March. The Labor Department has been unable to clearly separate new filers from re-filers.

"Claims have dropped by 75,000 since their early April peak, as the effect of refilings required under the March economic stimulus package has faded," said Ian Shepherdson, chief U.S. economist at High Frequency Economics Ltd. "We think there are solid grounds for expecting the downward trend to continue over the next few weeks."

The four-week moving average of new jobless claims, which smoothes out fluctuations in the weekly data, fell to 435,750 last week from a revised 454,250 the prior week.

But continued claims, the number of people who have been out of work for a week or more, rose to 3.77 million in the week ended April 20, the latest data available, from a revised 3.69 million the prior week.

Separately, outplacement firm Challenger, Gray & Christmas said job-cut announcements surged to 112,649 in April from 102,315 in March.

And the Commerce Department said orders for goods made in U.S. factories rose 0.4 percent in March to $318.5 billion after a revised 0.2 percent gain in February. Commerce had previously estimated that factory orders fell in February.

Economists surveyed by Briefing.com expected factory orders to be unchanged in March. The March orders data do not include orders from semiconductors, because many chipmakers did not participate in the survey.

Together, Thursday's data reinforced the idea that the economy is recovering from its first recession in a decade, but not so much that the Federal Reserve will need to start raising short-term interest rates any time soon.

"The economic recovery has legs -- those of a pony, not yet a quarter horse," said Wachovia Securities economist John Silvia.

U.S. stock prices were lower in afternoon trading, while Treasury bond prices also fell.

The labor market has weakened during a recession that likely began in March 2001, and many economists expect the unemployment rate to rise to 6.0 percent this year as businesses wait to be sure that a recovery in the economy and in corporate profits is on the way.

The Labor Department is scheduled to report Friday morning on April unemployment, and economists surveyed by Briefing.com expect the unemployment rate to creep up to 5.8 percent from 5.7 percent in March.

To keep consumers spending despite more than a million job cuts, the Fed cut its target for short-term interest rates 11 times in 2001. It left rates alone at its first two policy meetings in 2002, and recent data pointing to a sluggish recovery have convinced most economists that it will wait until at least June and possibly even August before beginning to raise rates again.

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To put things in perspective, however, March's 5.7 percent unemployment rate is significantly lower than the peaks that followed the two previous recessions -- 10.8 percent in 1983 and 7.8 percent in 1992.

Meanwhile, the gain in factory orders is further evidence that the long-suffering manufacturing sector is recovering from its 18-month recession. On Wednesday, the nation's purchasing managers said their index of April manufacturing activity showed expansion for the third straight month.

But in the Commerce Department report, new orders for durable goods fell 0.5 percent in March, and orders excluding defense rose 0.1 percent.