WASHINGTON -- The number of people claiming jobless benefits for the first time dropped less than expected last week, evidence that the labor market remains weak even as the economy is recovering.

The Labor Department said Thursday its tally of newly laid-off workers seeking unemployment insurance fell by 1,000 to a seasonally-adjusted 530,000. Analysts expected a steeper drop to 521,000, according to a survey by Thomson Reuters.

The report comes the same day the Commerce Department said the economy grew at a 3.5 percent pace in the July-September quarter, snapping a streak of four straight quarters of decline. But the economy isn't growing quickly enough to spur much hiring.

Still, the four-week average of claims, which smoothes out volatility, fell for the eighth straight week to 526,250, its lowest level since early January. Claims are slowly declining as companies lay off fewer workers.

Economists closely watch initial claims, which are considered a gauge of layoffs and an indication of companies' willingness to hire new workers.

The number of people continuing to claim benefits, meanwhile, dropped sharply by 148,000 to 5.8 million, a steeper drop than analysts expected. The figures on continuing claims lag initial claims by a week.

When federal emergency programs are included, the total number of jobless benefit recipients dropped by about 105,000 to 8.9 million in the week ending Oct. 10, the latest data available.

Congress has added up to 53 extra weeks of benefits on top of the 26 typically provided by the states. The Senate is considering legislation that would add another 14 to 20 weeks.

The large number of people remaining on the rolls shows unemployed workers are having a hard time finding new jobs.

The unemployment rate rose to 9.8 percent in September from 9.7 percent, the department said earlier this month, as employers cut 263,000 jobs.

More job cuts were announced this week. Apparel maker Hanesbrands Inc. said Tuesday that it is shutting a hosiery plant in Winston-Salem, N.C., and laying off 240 employees.

Among the states, California had the largest increase in claims, with 5,774, which it attributed to layoffs in the construction, services and agricultural industries. Puerto Rico, Minnesota, Nevada and Nebraska also reported increases. The state data lags initial claims by one week.

Wisconsin had the largest drop in claims, with 5,681, which it attributed to fewer layoffs in manufacturing. New York, Pennsylvania, Illinois and Oregon had the next largest decreases.