WASHINGTON -- The number of U.S. workers filing new applications for unemployment benefits fell last week, the latest sign that the labor market is improving.

Initial jobless claims tumbled by 14,000 to a seasonally adjusted 351,000 in the week ending March 10, the Labor Department said Thursday. Economists surveyed by Dow Jones Newswires had forecast that claims would fall by 5,000.

The prior week's figure was revised to 365,000 from 362,000.

The four-week moving average of claims, which smoothes out week-to-week volatility, was unchanged at 355,750.

New claims are hovering around levels last seen four years ago. And though the weekly numbers are somewhat erratic, figures have been trending lower since last spring and remained mostly below 400,000 since November. When that happens, hiring usually picks up.

Nonfarm payrolls grew by 227,000 in February and the economy has added an average 245,000 jobs over the past three months, according to Labor data released last week. The unemployment rate remained high at 8.3%.

Thursday's report showed the number of continuing unemployment benefit claims--those drawn by workers for more than a week--decreased by 81,000 to 3,343,000 in the week ended March 3. Continuing claims are reported with a one-week lag.

The unemployment rate for workers with unemployment insurance for the week ending March 3 fell to 2.6%, the lowest in four years.

State-by-state data, also reported with a one-week lag, showed Massachusetts with the biggest decrease in layoffs--2,974--as bus drivers and food service workers returned to their jobs after school holidays ended.

Claims in New York rose by 16,478 due to layoffs in transportation, education and food service industries.

The Labor Department said there were no special factors in the latest report.

The Labor Department report on jobless claims can be accessed at: http://www.dol.gov/opa/media/press/eta/ui/current.htm.

-By Jeffrey Sparshott and Eric Morath; Dow Jones Newswires; 202-862-9291; jef rey.sparshott@dowjones.com