Initial claims for unemployment benefits fell by 16,000 last week to a nearly three-month low of 254,000, showing no evidence of rising layoffs ahead of the key U.S. jobs report for June.
Economists polled by MarketWatch had forecast new claims to total a seasonally adjusted 265,000 in the week stretching from June 26 to July 2.
Layoffs have remained extremely low even though hiring tapered off in the early spring. Companies see little reason to reduce staff amid steady sales and a tight labor market in which skilled workers are harder to find.
Applications for unemployment benefits are the lowest since claims touched a postrecession bottom of 248,000 in mid-April.
The average of new jobless claims over the past month slid 2,500 to 264,750, the Labor Department said Thursday. The less volatile four-week average is seen as a more accurate measure of labor-market trends.
On Friday, the closely watched June employment report will show whether job creation remains sluggish or is starting to pick up again.
Economists polled by MarketWatch predict the U.S. gained a net 170,000 jobs in June, including more than 30,000 Verizon workers who returned to their jobs after a prolonged strike. The U.S. added 38,000 new jobs in May and 123,000 in April.
Continuing jobless claims fell by 44,000 to 2.12 million in the week ended June 25. These claims, reported with a one-week delay, reflect people already receiving unemployment checks.