New U.S. claims for unemployment benefits dropped more than expected last week, a government report showed on Thursday, pointing to continued gradual improvement in the labor market.

Initial claims for state unemployment benefits tumbled 42,000 to a seasonally adjusted 415,000, the Labor Department said, unwinding most of the previous week's weather-induced spike.

Economists polled by Reuters had forecast claims dropping to 420,000. The prior week's figure was revised up to 457,000, from the previously reported 454,000.

The claims data falls outside the survey period for the government's closely watched employment report for January, scheduled for Friday. The economy probably created 145,000 jobs after adding 103,000 in December, according to a Reuters poll.

The prior week's claims were distorted by extreme winter weather in large parts of the country and a Labor Department official said the four states that had reported a weather-related jump accounted for the bulk of last week's decline in filings.

The four-week moving average of unemployment claims -- a better measure of underlying trends - rose 1,000 to 430,500 last week.

The number of people still receiving benefits under regular state programs after an initial week of aid dropped 84,000 to 3.93 million in the week ended January 22 from an upwardly revised 4.0 million the prior week.

Economists had expected so-called continuing claims to fall to 3.92 million from a previously reported 3.99 million.

Unemployment