US jobless claims tumble

New claims for US unemployment insurance benefits tumbled last week to their lowest level in nearly three months as the jobs market improves, Labor Department data released Thursday showed.

Initial jobless claims, a sign of the pace of layoffs, dropped by 13,000 to 263,000 in the week ending October 3. The prior week's level was downwardly revised by 1,000 to 276,000.

Last week's claims reading was the lowest since July 18 and was much lower than analysts expected, with the consensus estimate pegged at 275,000.

The four-week moving average, which helps strip out volatility, fell by 3,000 to 267,500. Underscoring the downward trend in claims, the year-ago average was 291,250.

The weekly claims reading has held below 300,000 since March as layoffs trend at levels consistent with a labor market approaching full employment, analysts say.

"New and continuing claims suggest the job market continues to do well and the economy is nearing full employment," said Ryan Sweet of Moody's Analytics.

In September, the US unemployment rate was unchanged at 5.1 percent, a seven-year low, while job growth slowed sharply, with 142,000 net new jobs created in the month.