The number of Americans filing new claims for unemployment benefits posted a big decline last week, reflecting fewer layoffs in the auto industry.

The Labor Department reported that 304,000 newly laid off workers filed applications for benefits, a drop of 30,000 from the previous week, when claims had surged by 20,000.

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The big swings over the past two weeks reflected the normal layoffs that occur when the auto industry shuts down production lines for model changeovers. Looking past that volatility, the claims figures have been flashing signals that growth in the labor market is slowing as a result of the slowing economy.

Employers added a disappointing 121,000 jobs last month, below the 175,000 job increase that economists had expected.

Analysts believe that employers are putting their hiring plans on hold as they see increasing signs that economic activity is slowing from the sizzling 5.6 percent growth rate turned in during the first three months of the year. The forecast is for growth to be at just half that pace for the rest of the year.

Federal Reserve Chairman Ben Bernanke, delivering the Fed's twice-a-year economic forecast to Congress, said Wednesday that "the anticipated moderation in economic growth now seems to be under way," comments that sent financial markets soaring as investors believed they indicated that the Fed's two-year long campaign to hike interest rates was drawing to a close.

The drop of 30,000 claims last week was the biggest one-week drop in six weeks and the overall total of 304,000 claims was the lowest in six weeks.

For the week ending July 8, 44 states and territories had increases in claims and 9 had declines in claims.

States with the biggest increases included Michigan, up 31,976 because of the seasonal shutdowns of auto assembly lines for model changeovers, and New York, which posted an increase of 13,407 claims, which was attributed to layoffs in construction, service and transportation industries.

In all, 23 states and terroritories had increases in claims applications of 1,000 or more.

A total of four states had declines in claims that totaled 1,000 or more, led by Massachusetts, which had a drop of 3,165, and New Jersey, which had a decline of 1,572.

The state data lags behind the national figures by one week.

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