Initial claims for jobless benefits dropped to 381,000 for the week ending Dec. 3, the Labor Department reported on Thursday.
Economists had expected claims to drop from 402,000 to 395,000, according to Reuters. Instead, the previous week was revised up to 404,000 and claims fell by 23,000. The substantial drop puts them safely under the 400,000 level economists say they need to drop below to dent unemployment. The four-week moving average, a less volatile measure of claims, was also below that level at 393,250.
The U.S. unemployment rate is currently 8.6 percent.
This is the lowest level claims have hit since the week of Feb. 26, according to CNBC.