Unemployment benefit applications dropped to their lowest level since early April.
Thursday's Labor Department report shows the number of people applying for jobless benefits dropped by 5,000 last week to a seasonally adjusted 388,000.
The four-week average dropped to 396,750, the first time the average been below 400,000 in seven months.
Experts say the decline in applications could be a sign hiring is picking up.
The job market "is still weak but there are hopeful signs of some modest improvement," Steven Wood, an economist at Insight Economics, wrote in a note to clients.