The number of new U.S. jobless claims last week was smaller than expected at 378,000, the government said Thursday, while a more reliable barometer of the labor market's health fell to its lowest level in more than six months.

First-time claims for state unemployment benefits rose 17,000 in the Feb. 23 week from a sharply downwardly revised 361,000 the prior week, the Labor Department said. The climb, however, was not as large as Wall Street expectations for a rise to 385,000 from the 383,000 originally reported for the Feb. 16 week.

A more solid indicator of labor market trends, the closely watched four-week moving average, fell to 373,250 in the week ended Feb. 23 from 376,250 in the previous week. This was its lowest level since 372,000 in the week of Aug. 11, 2001.

Economists view the four-week average as a better gauge of labor market trends because it irons out weekly fluctuations caused by holidays and seasonal factors.

Federal Reserve Chairman Alan Greenspan on Wednesday said he foresaw a modest recovery in the economy and added that while he did not think the United States was yet "over the hump with respect to unemployment, we're approaching it."

A separate report released by the Commerce Department showed that the U.S. economy grew at a much faster rate than initially thought during the fourth quarter of 2001, logging the strongest quarterly gain for the year and supporting the belief the U.S. economy is turning the corner to recovery.

Gross domestic product, the broadest gauge of the economy's health, expanded at a revised 1.4 percent rate in the final three months of last year, seven times the 0.2 percent pace first estimated, Commerce said.

In a preliminary poll by Reuters, the unemployment rate for February, due out March 8, is expected to rise to 5.7 percent in February from 5.6 percent the prior month and create 9,000 jobs outside the farm sector. In January the United States economy lost 89,000 jobs.

In a sign people are still struggling to find work, so-called continued claims -- those by Americans who have already filed for at least a week of benefits -- rose to 3.49 million in the week ended Feb. 16, the latest week for which figures are available.

In the prior week, continued claims measured 3.43 million.

In the week ended Feb. 16, the latest for which state-by-state figures are available, the department said 20 states reported a decrease in claims exceeding 1,000, led by California with 8,817 fewer claims. That state gave no reason for the decrease. No states reported an increase in claims of 1,000 or more.