NEW YORK (CNN/Money) - New jobless claims fell in the United States last week, the government said Thursday, dropping below a critical benchmark level in advance of Friday's report on May unemployment.

The number of Americans filing new claims for unemployment benefits fell to 383,000 in the week ended June 1 from a revised 415,000 the prior week, the Labor Department reported. It was the first time since the March 16 week that jobless claims were below 400,000, a level pointing to a sluggish job market. Economists surveyed by Briefing.com expected 405,000 new claims.

More troubling, the number of people drawing benefits for more than a week rose to 3.82 million in the week ended May 25, the latest data available, from a revised 3.8 million the prior week.

"No doubt bears will highlight the rise in continuing claims, up another 29,000, but we are unmoved: A rising ratio of continuing to initial claims signals accelerating productivity growth, not a shaky recovery," said Ian Shepherdson, chief U.S. economist at High Frequency Economics Ltd. "Labor market conditions are improving -- but we still expect a soft payroll report Friday."

The data, which are notoriously volatile, did little to clear up the picture of the labor market's health before Friday's report by the Labor Department on May unemployment and job creation. Economists surveyed by Briefing.com expect the unemployment rate to rise to 6.1 percent from 6 percent in April and for the economy to have added 75,000 jobs in May after adding 43,000 in April.

U.S. stock prices fell in early trading, while Treasury bond prices were mostly higher.

The four-week moving average of new jobless claims, which smoothes out fluctuations in the weekly data, fell to 411,250 last week from a revised 419,750 the prior week.

Many economists think the Federal Reserve is unlikely to raise its target for short-term interest rates -- already at 40-year lows in an effort to make borrowing cheaper and keep consumers spending -- until unemployment stabilizes.

The question, however, is just when that stabilization will take place. After a recession, unemployment levels usually take longer to rebound than the broader economy because businesses wait for increased demand to justify hiring new workers. Many economists think such a process is happening now and that jobs will become more available later this year.

"The economic fundamentals seem to be lining up quite nicely, and they are all pointing to continued strong growth through the summer," said Joel Naroff, president and chief economist at Naroff Economic Advisors in Holland, Pa.

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"Now, if we can get a really good employment growth number on Friday, something I think is a real possibility, even that enigmatic curmudgeon who controls monetary policy might start to lighten up a bit," Naroff added, referring to Federal Reserve Chairman Alan Greenspan.

Others worry that final demand from both businesses and consumers will be weak for some time, keeping corporate profits low and discouraging business spending and new hiring. That raises the specter of a "jobless" economic recovery, such as the one that followed the 1990-91 recession, when unemployment rose for 15 months after the recession was over.

"I think the recovery is too strong to be a jobless recovery," said David Kelly, an economist at Putnam Investments. "But it is a close call."