NEW YORK (CNNMoney) -- The number of Americans filing for first-time unemployment benefits plunged suddenly during the week that included the July 4th holiday.
About 350,000 people filed for initial jobless claims in the week ended July 7, down 26,000 from the previous week, the Bureau of Labor Statistics said Thursday.
The figure was a huge surprise, marking the lowest level of claims since March 2008. Economists had been expecting 375,000 claims last week.
Jobless claims are a closely watched economic indicator, correlated with layoffs, and when they fall, it's seen as a positive sign that the job market could be improving. In this case though, economists cautioned against breaking out the champagne.
Several factors may have made last week look better than it actually was. The July 4th holiday for example, could have distorted the figures.
Meanwhile, fewer auto factories shut down for their retooling process -- a phenomenon that typically happens in early July and results in temporary layoffs. The Labor Department tries to adjust for this factor but may have over-adjusted it last week.
Meanwhile, 3,3 million people filed for their second week of unemployment benefits or more in the week ended June 30, the most recent data available. That number was barely changed from the week before
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