NEW YORK (CNNMoney.com) -- The number of Americans filing for their first week of unemployment benefits unexpectedly fell for a second straight week last week, according to a government report released Thursday.
The number of initial claims fell to 420,000 in the week ending Dec. 11, down 3,000 from 423,000 claims filed the week before, the Labor Department said. It was the second lowest level of the year.
Economists surveyed by Briefing.com were expecting 425,000 new claims.
The 4-week moving average of initial claims -- a number that tries to smooth out week-to-week volatility -- was 422,750, down 5,250 from the previous week.
The weekly figure has been stuck between 400,000 and 500,000 for more than a year, but during the last month, claims have started to drift toward the lower end of the range, pointing to a slight improvement in the job market.
Still, economists say that weekly initial claims need to drop below 400,000 to signal a sustained recovery in the job market, and before the unemployment rate -- which rose to 9.8% -- can drop significantly.
But the current downward trajectory is "very encouraging," said Stuart Hoffman, chief economist with PNC Financial Services.
"If you couple [the drop in jobless claims] with various indicators that speak to an improved outlook for hiring, it suggests that we could see an increase in the number of people working," Hoffman said.
He added that the uptick in the November unemployment rate could have been a "head fake," and will likely reverse course over the next couple of months.
"There's no shortage of reasons of why businesses have been dragging their feet when it comes to hiring, but the key is that those hurdles are either going away or have been reduced, so we will see more hiring, fewer layoffs, and a lower unemployment rate soon."
Continuing claims: The government said 4,135,000 people filed unemployment claims for their second week or more, during the week ended Dec. 4, the most recent data available. That's up 22,000 from the week before.
Economists were expecting 4,078,000 people to file ongoing claims.
But overall, the 4-week moving average for ongoing claims fell by 47,250 to 4,185,500.
Continuing claims reflect people who file each week after their initial claim until the end of their standard benefits, which usually last 26 weeks. The figures do not include those who have moved to state or federal extensions, or people who have exhausted their benefits but are still out of a job.
State-by-state: Claims fell by more than 1,000 in only two states. Iowa had the largest reduction, by 2,146, due to fewer layoffs in the construction and manufacturing industries.
But in 22 states, claims jumped by more than 1,000. Florida topped the list with 6,337 initial claims, mostly due to layoffs in the construction, trade, service, manufacturing and agriculture industries.
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