WASHINGTON -- The tally of laid-off workers continuing to claim jobless benefits fell by the largest amount in almost a year, suggesting that more unemployed workers may be finding work.
At the same time, new claims for unemployment insurance dipped slightly for the third straight week.
The Labor Department said the total unemployment benefit rolls fell by 255,000 to a seasonally adjusted 4.5 million, the lowest total since December 2008.
Some of those recipients may have exhausted the 26 weeks of benefits customarily provided by most states. A Labor Department analyst said state agencies didn't provide any explanation for the drop.
New claims fell by 3,000 to a seasonally adjusted 456,000. The four-week average of new claims, which smooths volatility, rose for the fourth straight week to 463,000.
First-time claims have hovered near 450,000 since the beginning of the year after falling steadily in the second half of 2009. That has raised concerns among economists that hiring remains weak and could slow the recovery.
Economists look closely at the total number of people claiming benefits. They monitor those who are initially receiving 26 weeks of state benefits, on average. But they are also concerned about the number of people who have transitioned to extended federal unemployment benefits, which can last up to 73 additional weeks.
Nearly 5.4 million Americans are receiving extended benefits. All told, about 9.8 million people drew unemployment in the week ending May 22, the latest data available.
That total is likely to drop in the coming weeks. The extended benefit program expired in early June, and Congress is debating whether to continue it through the end of November.
About 325,000 people will lose unemployment aid by the end of this week due to the cutoff, the department estimates. That total could grow to 1.25 million by the end of the month if the extension isn't passed.
Last week, the Labor Department said the economy generated only 41,000 private-sector jobs in May, down from 218,000 in April.
Temporary census hiring added another 411,000 jobs, and the unemployment rate fell to 9.7 percent from 9.9 percent.
The economy is expanding, but at a weaker pace than in many previous recoveries. The Commerce Department said earlier this month that the nation's gross domestic product -- the broadest measure of economic output -- grew at a 3 percent annual rate in the January-to-March quarter. That was down from the 5.6 percent pace in the fourth quarter of 2009.
After the last deep recession in the early 1980s, the economy grew at a pace of 7 percent to 9 percent for five straight quarters.