Initial jobless claims fell 0.6% to 326,000 for the week ending Jan. 11, according to a Labor Department report released today. That's a week-to-week drop of 2,000 claims.

After dropping a revised 4.9% the previous week, this newest report squeaked below analyst expectations by 1,000 claims. Jobless claims are notoriously hard to interpret during the holiday season, and this latest report could be one of the first signs of stability coming out of the holiday season.

Source: Author, data from Labor Department. 

From a more long-term perspective, a 3.9% drop in the four-week moving average to 335,000 initial claims marks the second week of decreases after a month of increases. 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.

On a state-by-state basis, 14 states recorded a decrease of more than 1,000 initial claims for the week ending Jan. 4 (most recent available data). Michigan claims dropped the most, pointing to fewer manufacturing layoffs as the main reason for its 17,640-claim dip. 

For the same period, 14 states also registered increases of more than 1,000 initial claims. New York initial claims shot up 28,310 due partially to transportation and warehousing layoffs, while Georgia cited manufacturing layoffs for its 18,730 increase.

The unemployment rate fell last month to 6.7% from 7% in November. Much of that decrease came from 347,000 unemployed workers leaving the workforce. The government counts people as unemployed only if they are looking for work.

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