The number of Americans filing for unemployment benefits fell to a near 44-1/2-year low last week, supporting expectations of a sharp rebound in job growth in October after employment was depressed by hurricane-related disruptions in September.
Other data today showed worker productivity increased at its fastest pace in three years in the third quarter.
A tightening labour market and improving productivity likely strengthen the case for the Federal Reserve raising interest rates in December, despite wage pressures remaining tame.
Initial claims for state unemployment benefits decreased 5,000 to a seasonally adjusted 229,000 for the week ended 28 October, the Labour Department said.
That was not too far from 223,000, a 44-1/2-year low touched in mid-October. Economists had forecast claims rising to 235,000 in the latest week.
Claims have dropped from an almost three-year high of 298,000 hit at the start of September in the aftermath of Hurricanes Harvey and Irma, which ravaged parts of Texas and Florida.
Harvey and Irma have largely dropped out of the data for the mainland United States.
The Labour Department, however, said claims-taking procedures continued to be severely disrupted in the Virgin Islands.
The situation in Puerto Rico had improved and backlogs were now being processed, the department said.
Irma and hurricane Maria destroyed infrastructure, virtually cutting off communication with the islands.
Last week marked the 139th straight week that claims remained below the 300,000 threshold, which is associated with a strong labour market.
That is the longest such stretch since 1970, when the labour market was smaller.
The labour market is near full employment, with the jobless rate at a more than 16-1/2-year low of 4.2%.
The dollar rose slightly against a basket of currencies after the data, while prices for US Treasuries were little changed.
The Fed kept interest rates unchanged yesterday.
The four-week moving average of initial claims, considered abetter measure of labour market trends as it irons out week-to-week volatility, dropped 7,250 to 232,500 last week.
That was the lowest reading since April 1973.