(Reuters) - The number of Americans lining up for jobless benefits last week fell to a four-year low, a hopeful sign for the struggling labor market although some of the improvement may be temporary, government data showed on Thursday.
A separate report showed import prices falling sharply in June, fresh evidence of a cooling global economy but also a reminder that a drop in gasoline prices could help U.S. consumers.
The Labor Department said new claims for state unemployment benefits dropped 26,000 to a seasonally adjusted 350,000.
The drop, which brought new claims to their lowest level since March 2008, was much steeper than Wall Street economists expected.
"It's welcome news," said Peter Kenny, managing director at Knight Capital in Jersey City, New Jersey.
U.S. stock index futures trimmed losses after the data. U.S. bond prices held gains, while the dollar fell against the yen.
The prior week's figure was revised slightly higher to 376,000 from the previously reported 374,000.
Hiring by U.S. companies slowed dramatically in the second quarter as employers grew worried about Europe's snowballing debt crisis, which is weighing on the global economy. Many employers also are concerned over the possibility the U.S. government may cut spending and let tax cuts expire next year, which could send the economy into recession.
The level of new claims for unemployment insurance was the lowest since March 2008 - the early days of the 2007-2009 recession.
The fall in claims data suggests that while employers are holding the line on hiring, at least they aren't picking up the pace of layoffs. That could boost hopes the stalling in job creation might prove temporary.
Still, the jobless claims data had an important caveat.
A Labor Department official noted that part of the drop might be due to some auto manufacturers breaking with tradition and keeping their plants open during the first week of July to meet demand.
Many auto plans normally close during that week to retool for new models.
"It seems like the Labor Department is pretty adamant that this is more of a wonky seasonals adjustment than something we need to put too much stock in," said Michael Hanson, U.S. economist at Bank of America-Merill Lynch. "The underlying trend in claims is probably still in the 370,000 range."
The four-week moving average for new claims, a better measure of labor market trends, fell 9,750 to 376,500. That is still a significant drop, although the average is only at its lowest since May.
In a separate report, the Labor Department said import prices fell last month by the most in more than three years, mostly due to a plunge in the cost of imported oil.
That puts U.S. inflation pressures on ice for now. Overall import prices dropped 2.7 percent in the third straight monthly decline.
Import prices have only risen once in the last seven months. June's decline was the steepest since December 2008.
The decline last month was even more than analysts had expected, and could give the U.S. Federal Reserve more scope to ease monetary policy if policymakers think the economy needs it.
The Fed targets annual inflation at 2 percent, and policymakers' preferred measure of inflation showed prices up 1.5 percent in May from a year earlier.
On Wednesday, minutes from the central bank's June meeting showed the Fed is open to buying more Treasury bonds to stimulate the economy, but the recovery might need to weaken for a consensus to build.
Prices for imported petroleum plunged 10.5 percent, also the sharpest drop since December 2008.
Even stripping out fuels and food, import prices were down 0.3 percent. That could be a sign of the recent cooling in the global economy, which has been largely caused by Europe's debt crisis.
China's economy is also showing signs it is slowing.
The Labor Department report also showed export prices fell 1.7 percent last month, the second consecutive monthly decline.
