The U.S. Labor Department said first-time jobless benefits claims dropped by 19,000 to 326,000 in the week that ended Saturday.
The four-week rolling average fell, dropping by 4,500 to 341,250.
The previous week's first-time claims figure was revised higher from 343,000 to 345,000.
The largest increases in initial claims for the week that ended July 20 were in California, Missouri and Kansas with gains of 7,723, 635, and 427, respectively.
The largest decreases were in New York, Pennsylvania and Alabama with 14,966 fewer claims, 8,817 fewer and 6,019 fewer, respectively.
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