The number of Americans filing for unemployment benefits dropped less than expected last week as California continued to process a backlog of applications caused by computer malfunctions, Reuters news reported.

Initial claims for state unemployment benefits fell 12,000 to a seasonally adjusted 350,000, the Labor Department said on Thursday. Claims for the prior week were revised to show 4,000 more applications filed than previously reported.

A Labor Department analyst said claims from the backlog in California were still working their way through the system.

Technical problems as California converted to a new computer system have distorted the claims data since September, making it difficult to get a clear read of labor market conditions.