New claims for state unemployment insurance fell last week, the third sharp decline in a row, suggesting the rash of layoffs seen in recent months may be moderating a bit. 

The number of workers filing new applications for jobless benefits declined by a seasonally adjusted 23,000 to 346,000 for the week ending July 28 after dropping by 48,000 the week before, the Labor Department reported Thursday. 

The decline in claims last week pushed them to their lowest level since mid-February. 

This time of year jobless claims figures are usually volatile as the automotive and textile industries temporarily lay off workers, making seasonal adjustment difficult, government analysts said. 

Given that, private economists tend to focus on the more stable four-week moving average of jobless claims, which smoothes out week-to-week fluctuations. The moving average also fell last week to 395,250, the lowest level since late April. 

In an effort to revive the ailing economy, the Federal Reserve has slashed interest rates six times this year. Many analysts predict the Fed will order another rate reduction when its meets next on Aug. 21. 

The yearlong economic slowdown has been hard on companies struggling with slumping demand. To cope, they have sharply cut production and capital investment and laid off workers. In June, the unemployment rate rose to 4.5 percent as businesses slashed payrolls for the second time in three months. 

Many economists are estimating the jobless rate hit 4.7 percent in July and that businesses eliminated another 38,000 jobs. The government releases the employment report for July on Friday. 

The biggest fear among some economists is that the labor market will seriously weaken, causing consumers to curtail their spending and tip the economy into recession. 

Still, many economists are hopeful that the Fed's aggressive credit-easing campaign, along with tax-cut refunds of up to $600 for couples will fuel economic growth later this year. 

For the week ending July 21, 45 states and territories reported a decrease in claims, while 7 reported an increase. The state information lags a week behind the national figures and is not seasonally adjusted.