A total of 311,000 people filed Initial claims for jobless benefits last week, the Labor Department said. That is 9,000 fewer than the week before, and well below economists' forecasts. Indeed, it is the lowest level since July 28.

Even the four-week moving average-a less-volatile measure-also fell, to 320,750 last week from 324,250 the previous week.

The numbers should damp fears of further erosion in consumer spending, which would brake economic growth, economists said. That is particularly important amid tighter credit and continuing weakness in the housing market.

The actual number of people receiving unemployment benefits has also fallen. In the week ending September 8, a little more than 2.5 million people were receiving benefits, down from about 2.6 million a week earlier.

The four-week moving average declined by 5,500 from the previous week.