Fewer Americans filed unemployment benefit claims last week, government data said Thursday, pushing the closely watched metric of labor market health lower as the US economy improves.

The Labor Department reported a seasonally adjusted 385,000 new claims made in the week ended July 31, its second consecutive weekly decline even if it remained slightly higher than analysts had expected.

Claims have held steady in the 400,000-range for weeks even as Covid-19 vaccines have allowed for a steady reopening of the economy after mass layoffs occurred last year as the pandemic began.

"We expect the labor market to improve and job growth to pick up, although new variants of the virus as well as near-term constraints on labor supply are downside risks," Rubeela Farooqi of High Frequency Economics said.

Last week's filings were 14,000 less than the previous week's downwardly revised level, but remained above the post-pandemic low of 368,000.

Fewer Americans are filing claims for unemployment benefits as the US economy adds back jobs lost during the Covid-19 pandemic
Fewer Americans are filing claims for unemployment benefits as the US economy adds back jobs lost during the Covid-19 pandemic GETTY IMAGES NORTH AMERICA / Justin SULLIVAN

Even with the improvements, the data showed nearly 13 million people receiving benefits as of the week ended July 17, though that was about 200,000 fewer than the week prior.

The federal government expanded unemployment benefits during the pandemic, but some states have ended those programs early, arguing they kept jobless people from returning to work.

Farooqi said the overall decline in people receiving aid was likely due to those programs ending.

However the Labor Department said the number of people receiving aid under the Pandemic Unemployment Assistance program for freelance workers rose by 1,416 last week.

As of the week ended July 17, a similar increase was seen in people receiving aid under a program for the long-term unemployed, according to the data.

Coronavirus