First-time claims for unemployment benefits fell to the lowest level in four decades in the week ending July 18, the Department of Labor reported Thursday, at 255,000.

Claims had not been that low since November of 1973, when the U.S. labor force was 91 million. Today it is 157 million.

Thursday's report easily beat Wall Street analysts' expectations for around 279,000 claims, which are adjusted for seasonal fluctuations.

The four-week moving average of claims also fell, by 4,000 to 278,500.

Unemployment claims have been running under 300,000 since the end of February.

Claims, which are released on a weekly basis, are considered a leading indicator for the labor market, with fewer claims representing a slower pace of layoffs.

The summer slowdown in claims has coincided with ongoing improvement in the monthly jobs report.

Unemployment fell to 5.3 percent in June, according to the Bureau of Labor Statistics, and net payroll job gains rose to 221,000 averaged over the past three months.

That rate of job creation is slower than the pace for 2014, but still high enough to keep the unemployment rate trending down.

Thursday's jobless claims report covered the week in July which will be used as the reference week for the July jobs report, due out on August 7.

Despite the decades-low initial claims number reported Thursday, government officials believe that the U.S. labor market is still not at full health.

The unemployment rate is several tenths of a percentage point above the 5 percent to 5.2 percent range that Federal Reserve officials see as the long-run health rate. The unemployment rate, however, understates the true weakness in the jobs market because a large number of people have been forced into part-time work or have become discouraged about finding a job and given up searching, thereby falling out of the calculation of the official unemployment rate.