Seasonally adjusted initial jobless claims fell to the lowest level since April 2008, dropping by 4,000 to 3,64,000 in the week ended December 17, 2011, compared to the previous week.
In the week ended December 10, 2011, jobless claims stood at 3,68,000.
The latest data is a sign that US companies are slowing the pace of firings amid an improvement in the nation's economic outlook.
Robust US economic data in the recent months may have lifted business confidence in the US.
US Manufacturing activity expanded at the fastest pace in five months in November 2011, a sign that domestic demand may be picking up.
Moreover consumer confidence rose to a six-month high in December 2011, while the country's housing market is also showing signs of improvement as housing starts rose to their highest level in 19 months in November 2011.
The four -week moving average of jobless claims fell by 8,000 to 3,80,250 in the week ended December 17, 2011 from the previous week.
The advance seasonally adjusted insured unemployment rate was 2.8 per cent for the week ended December 10, 2011 , down 0.1 percentage point from the previous week.
The number of people who continued to receive unemployment insurance benefits fell by 79,000 to 3,546,000 in the week ended December 10, 2011 from the previous week.
Economy experts reckon that an improvement in labour market conditions, coupled with easing inflationary pressures may boost consumer spending in the coming months, which accounts for 70 per cent of the US economy.
Dion Global Solutions Ltd