The number of US workers claiming unemployment benefits dropped to the lowest level since January last week, official figures showed on Thursday, offering hope that the pace of job cuts could be abating.

New jobless claims fell by 52,000 to 565,000 in the week ending July 4, according to the Department of Labor. The decline was much better than economists expected, although some warned against false hopes, pointing to distortions from the shortened holiday week and shifts in auto layoffs as reasons for the improvement.