The number of people seeking unemployment dropped sharply last week, falling to the lowest level since April.
Weekly applications dropped 37,000 to a seasonally adjusted 391,000, the Labor Department said Thursday.
The report is the first time applications have fallen below 400,000 since Aug. 6.
Technical factors related to the seasonal adjustment of the data was in part responsible for the improved stats, a Labor Department spokesman said.
The spokesman also said some states reported higher applications in previous weeks because of Hurricane Irene.
As a result, the drop "may not be as encouraging as it looks," said Paul Dales, an economist at Capital Economics.
"Further falls will be needed before we can conclude a downward trend is underway," Dales said.
The Labor Department noted applications typically need to fall below 375,000 to signal substantial job growth. They haven't been that low since February.
Many economists believe the most recent evidence shows the job market is sluggish and the economy is weak.