U.S. jobless claims data declined slightly last week, the government said Thursday, in a report suggesting the labor sector continues to show only modest improvement.

First-time claims for state unemployment benefits stayed below the key 400,000 mark for the third straight week, dropping by 2,000 to 393,000 in the June 15 week from a revised 395,000 for the prior week, the Labor Department said.

This, however, was not as low as Wall Street's expectations for a fall to 387,000 from the 390,000 originally reported for the June 8 week.

The Labor Department said the drop also reflects the end of the first wave of people seeking the government's temporary 13-week extension of unemployment insurance benefits.

First-time claims had remained above the 400,000 mark -- a indication of a lackluster labor market -- for 10 straight weeks, before dipping below the key level in the June 1 week.

A more solid indicator of labor market trends, the closely watched four-week moving average, fell for the eighth straight week to 396,250 in June 15 week from 403,500 in the previous week, and the lowest since 394,250 in the March 16 week.

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.

In a sign people are still struggling to find a job, the number of unemployed who continue to draw a week of benefits, rose to 3.78 million in the June 8 week, the latest week for figures are available.