The Labor Department said Thursday that initial applications for jobless benefits dropped by 11,000 to 448,000, the lowest level in four weeks. The new total was slightly higher than economists had expected.
The four-week average for claims edged up slightly to 462,500, still above the level that economists believe signals sustained improvements in the job market.
Claims have been on a roller coaster in recent weeks, posting sharp increases in the first two weeks of April and then falling for the past two weeks. Part of those swings reflected troubles that the government has in seasonally adjusting the figures around Easter, which falls at different times each year.
However, economists said the uneven declines in claims also reflect the fact that the labor market is still struggling to emerge from the country's worst recession since the 1930s.
The unemployment rate has been stuck at 9.7 percent for three consecutive months. Many economists believe that the 10.1 percent jobless rate hit in October may turn out to be the peak for unemployment in this slump but they are not forecasting a rapid improvement given all the headwinds still facing the economy. The economy did add 162,000 jobs in March, the largest increase in three years.
Sal Guatieri, senior economist at BMO Capital Markets, said the new claims report showed that "U.S. labor markets continue to heal, slowly."
Guatieri predicted that payrolls should show a moderate gain in April. The consensus view of economists surveyed by Thomson Reuters is that payroll jobs increased by 175,000 in April while the unemployment rate will remain stuck at 9.7 percent. The Labor Department will release the April jobless report on May 7.
Many analysts believe that the four-week moving average needs to fall below 425,000 to signal sustained job growth. Applications for jobless benefits peaked during the recession at 651,000 in March 2009.
The number of people continuing to claims benefits fell by 18,000 to 4.65 million.
That figure lags the initial claims by one week. It doesn't include millions of people who have used up the regular 26 weeks of benefits typically provided by states and are receiving extended benefits of up to 73 additional weeks paid by the federal government.
The department said that 43 states and territories had declines in claims for the week ending April 17 while 10 states saw increases.
The states with the largest declines were New York, a drop of 21,000 which was attributed to fewer layoffs in the service and transportation industries, and California, which saw claims fall by 15,380.
The states and territories with the largest increases in claims for the week of April 17 were Puerto Rico, up 3,549; Iowa, up 1,606, and Georgia, up 1,412.
There have been some hopeful signs recently in the economy. Many companies are reporting strong first-quarter profits as consumers, who account for 70 percent of the total economy, spend more.
While the profit turnaround has not yet produced a dramatic increase in hiring, it at least provides hope that the worst of the economic slump is over.
Companies in the Standard & Poor's 500 index have reported 76 percent higher operating earnings than a year ago - on pace to be the biggest year-over-year increase ever, according to S&P analyst Howard Silverblatt. Nearly half the companies in the index have reported earnings so far.
Part of the reason for the big jump is that the economy was hitting the depths of the recession a year ago, making the rebound look more impressive.
Among the winners was Ford Motor Co. which reported a $2.1 billion profit on 15 percent higher revenue for the first quarter this year and said it plans to boost production. Caterpillar Inc. also reversed a loss from a year ago and said demand for its construction and mining equipment is surging.
A number of major corporations have boosted their full-year profit forecasts this month. This week alone, the list includes DuPont Co., Estee Lauder Cos. and Whirlpool Corp.