Initial jobless claims dropped 4.5% to 320,000 for the week ending Aug. 10, according to a Labor Department report released today. That's the lowest number since October 2007, a sign of dwindling layoffs and steady if modest job growth.

After increasing a revised 2.1% to 335,000 the previous week, analysts had expected a much smaller dip to 330,000 initial jobless claims. 

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Source: Author, data from Labor Department. 

From a more long-term perspective, a 1.2% dip in the four-week moving average to 332,000 initial claims (the fewest since November 2007) marks the fifth straight week of declines for this metric. Both the latest week's claims and the four-week average fall significantly below 400,000, a cutoff point that economists consider a sign of an improving labor market.

At the depth of the recession in March 2009, weekly applications for unemployment benefits numbered 670,000. They have fallen steadily ever since.

On a state-by-state basis, only Oregon recorded a decrease of more than 1,000 initial claims for the week ending Aug. 3 (most recent available data), and did not provide an explanatory comment for its 1,640-claim dip. 

For the same period, California, Ohio, and Texas all registered increases of more than 1,000 initial claims. California's initial claims headed up 3,720 due to services sector layoffs, Ohio added 1,270 due primarily to manufacturing layoffs, and Texas provided no comment for its 1,150-initial-claim increase.

Nearly 4.6 million Americans received unemployment benefits in the week that ended July 27, the latest period for which data are available. That's about 66,000 more than in the previous week but nearly 20% less than a year ago.

-- Material from The Associated Press was used in this report.

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