New claims for U.S. unemployment aid (search) fell a larger-than-expected 28,000 last week as the pace of hurricane-related claims slowed, the government said Thursday.

First-time claims for state unemployment insurance benefits fell for the second straight week, dropping to 328,000 the week ended Oct. 22 from an upwardly revised 356,000 the prior week, the Labor Department (search) said.

Economists, on average, had expected claims to decline to 340,000 from an original reading of 355,000 the prior week.

The Labor Department said some 24,000 claims, not seasonally adjusted, came from people put out of work after hurricanes Katrina and Rita.

Before the hurricanes, claims figures had shown the U.S. job market stabilizing at healthy levels.

The four-week moving average of weekly claims, viewed as a more accurate indicator of longer-term labor conditions because it flattens weekly volatility, fell for the third straight week, slipping to 366,500 from 376,500 the previous week.

The number of people staying on the benefit rolls (search) after receiving a week of assistance rose to the highest level since Aug. 7, 2004. These so-called continued claims rose for the second consecutive week, climbing 42,000 to 2.90 million in the week ended Oct. 15, the latest period for which the data are available.