Initial jobless claims fell more than expected.
Claims, which count people applying for unemployment insurance for the first time, dropped to 254,000 last week.
Economists had forecast that claims fell to 260,000 last week, according to the Bloomberg consensus.
The prior week saw claims rise by 7,000 to 265,000 last week.
The four-week moving average was 259,750, an uptick of 1,750 from the previous week’s revised average.
Initial jobless claims are used as a real-time proxy for the pace of layoffs and the overall health of the labor market, since people usually file for benefits soon after they lose their jobs.
The current level is near the lowest since the 1970s, and marks 88 consecutive weeks of claims below 300,000.