The number of US workers claiming unemployment benefits fell to the lowest level since January last week, as the pace of job cuts eased and car companies shifted the timing of their layoffs.

New jobless claims fell by 47,000 to 522,000 in the week ending July 11, according to the Department of Labor . The drop was more than economists expected, although many warned against false hopes, pointing to distortions due to automobile makers being forced to impose more severe job cuts earlier in the year.