The number of people filing an initial claim for jobless aid fell by a larger-than-expected 25,000 in the holiday-shortened week ended Oct. 16, the government said on Thursday.

First-time claims for state unemployment insurance benefits (search) fell to 329,000 last week from a revised 354,000 in the prior week, the Labor Department (search) said.

Hurricanes, which battered Florida and other southern states during August and September, were not a significant factor behind the drop in initial claims, a Labor Department analyst said.

The fall was steeper than Wall Street expectations for a drop to 345,000 from the prior week's originally reported 352,000.

The analyst said there was no specific explanation for the drop in initial claims, but said when a week includes a federal holiday "it is not uncommon to be a bit more volatile." Columbus Day fell on Monday, Oct. 11.

A four-week moving average of initial claims, which smoothes short-term volatility, dropped to 348,250 from 353,750, a level that economists associate with moderate hiring.

The number of people who remained on state unemployment rolls after claiming an initial week of jobless aid slipped to 2.80 million in the week ended Oct. 9 from 2.81 million in the prior week.