New claims for unemployment benefits fell as expected last week, a government report showed on Thursday, showing little sign of a pick-up in layoffs in the wake of a slump in business and consumer confidence.

Initial claims for state unemployment benefits dropped 12,000 to a seasonally adjusted 409,000, the Labor Department said, still pointing to a jobs market struggling to find strength, but well short of a recession signal.

Economists polled by Reuters had forecast claims falling to 410,000 last week. The prior week's claims were revised up to 421,000 from the previously reported 417,000.

While the claims data has no bearing on August's nonfarm payrolls count to be released on Friday, it showed no evidence that businesses responded to the recent financial market turmoil by aggressively laying off workers.

Nonfarm employment is expected to have increased 75,000 in August, according to a Reuters survey, dampened by a strike at Verizon Communications. Payrolls rose 117,000 in July.

About 45,000 Verizon workers went on strike during the survey period for August payrolls. Because they did not receive a paycheck that week, they would be counted as jobless in the government survey.

A Labor Department official said there were no special factors influencing last week's claims report. The Verizon strike helped to push up claims in the last two weeks.

The four-week moving average of claims, considered a better measure of labor market trends, rose 1,750 to 410,250 last week.

The number of people still receiving benefits under regular state programs after an initial week of aid dropped 18,000 to 3.74 million in the week ended August 20.

The number of Americans on emergency unemployment benefits increased 31,261 to 3.12 million in the week ended August 13, the latest week for which data is available.

A total of 7.34 million people were claiming unemployment benefits during that period under all programs, up 45,531 from the prior week. (Reporting by Lucia Mutikani, Editing by Andrea Ricci)

Unemployment Fall