The number of jobless claims filed by Americans fell by 26,000 filings during the week ending July 7, the U.S. Labor Department said.
Initial claims hit 350,000 on a seasonally adjusted basis for the period, compared to 376,000 a week earlier.
The four-week moving average hung around 376,500, a decline of 9,750 filings from the previous week's revised average of 386,250.
The largest increases in initial claims occurred in New York, Kentucky, Michigan, California and Oklahoma.
The states of Florida, Texas, Massachusetts and Maryland saw the largest declines in claims.
Analysts with Econoday said the decline is the result of low inventories in the auto sector which are "pushing back summer shutdowns for factories." The research firm said that trend "clouds jobless data" for the week.
"As summer shutdowns do begin, this improvement will presumably reverse to some degree," Econoday wrote.