For the week ended 13 May, initial jobless claims fell to 232,000 from 236,000.
Economists polled by MarketWatch has expected new claims to total a seasonally adjusted 240,000 in the seven days stretching from May 7 to May 13. The four-week moving average declined to 1.946mn from 1.966mn previously and the lowest level since January 1974. USA stock index futures were mostly weaker.
Secondary unemployment claims, those which are not filed for the first time and referencing the week before, decreased by 22,000 to 1.898m - the least since November 1988. Prices of U.S. Treasuries were trading lower. The figure has fallen 12 percent in the past year.
Benefit claims have been a particularly durable indicator of tightness in the labor market, with initial filings holding at lower than 300,000 for more than two years.
The economy grew by just 0.7 percent in the first three months of the year, but there are signs it will expand more quickly in the current quarter.
Financial markets are pricing in a roughly 69 percent chance of a 25-basis-point hike at the Fed's June meeting, down from 78.5 percent on Tuesday, according to CME Group's FedWatch program.
The U.S. dollar rose against a basket of currencies after the data while U.S. short-term interest rates futures turned lower. Stocks on Wall Street were slightly higher after Wednesday's sell-off. While a gauge of new orders received by factories slipped, unfilled orders increased.