Initial jobless claims are now at their lowest level since July 11, the figures show. New unemployment benefit applications peaked at 674,000 in late March.

The continued decline in the number of people making initial claims for unemployment benefit comes as the administration of Barack Obama, the US president, defends itself against claims by the opposition that a $787bn economic stimulus package has done little to shore up the flagging economy.

Government data released last week showed that US Gross Domestic Product (GDP) – the country's total economic output - fell a less-than-expected one per cent in the second quarter of 2009, boosting hopes that the economy is stabilising.

However, the labour department is set to release July jobs data on Friday that economists expect will show the unemployment rate has risen to 9.6 per cent from 9.5 per cent in June.

And the US government has said that while the economy is showing signs of turning the corner from its worst downturn since the Great Depression of the 1920s and 1930s, jobs will still continue be lost before a full recovery.