However, the report showed that the number of unemployed workers continuing to draw jobless benefits rose to 3.7 million for the week ending June 22, which suggests companies are not ready to fill all jobs.
New applications for jobless benefits dropped by a seasonally adjusted rate of 11,000 to 382,000 for the workweek ending June 29, pushing claims to their lowest level since last March 24.
It was the second straight week in which new claims fell and the fifth straight that claims were below the 400,000 mark, which is a level associated with weakness in the job market. The four-week moving average of claims last week dipped to 392,000, the lowest level in just over three months.
Even if companies reduce the speed at which they lay off workers, analysts said the jobless rate will rise if companies are reluctant to hire employees back.
The government will release June's employment report Friday and many analysts are predicting the jobless rate will edge up to 5.9% from the current 5.8% rate.