NEW YORK (CNN/Money) - New weekly claims for jobless benefits in the United States eased last week, the government said Thursday, as the labor market's recovery from the loss of more than 1.5 million jobs last year continued to progress slowly.

The Labor Department said the number of Americans filing new claims for unemployment benefits slipped to 389,000 in the week ended Aug. 17 from a revised 391,000 the prior week. Economists, on average, expected 385,000 new claims, according to Briefing.com.

The four-week moving average of new jobless claims, which smoothes out fluctuations in the weekly data, rose to 388,250 last week from a revised 382,500 the prior week.

But continued claims, the number of people drawing benefits for more than a week, fell to 3.52 million in the week ended Aug. 10, the latest data available, from a revised 3.53 million the prior week.

Earlier this month, the Labor Department reported that the nation's unemployment rate held steady at 5.9 percent in July, while employers added just 6,000 new jobs.

U.S. businesses cut more than 1.5 million jobs during a recession that began in March 2001 and lately have been able to get more production out of fewer workers, making them reluctant to increase hiring until they see a need to greatly expand production.

Last week, the Federal Reserve decided to leave its target for short-term interest rates alone, keeping borrowing costs low and encouraging consumers to spend despite the labor market problems; but it also warned that weak stock prices and concerns about corporate accounting could put the economy at risk of slumping further.

In speeches Wednesday, however, a number of Fed officials expressed optimism about the economy, indicating it was unlikely the Fed would cut rates again any time soon.

Those comments drove Treasury bond prices down Wednesday, and they continued to fall Thursday morning. U.S. stock market futures were unaffected by Thursday's data and were little changed, pointing to a mixed opening on Wall Street.