CORRECTED-U.S. jobless claims fall to lowest in 4-1/2 years

(Clarifies number for September payrolls in seventh paragraph)

WASHINGTON, Oct 11 (Reuters) - The number of Americansfiling new claims for unemployment benefits fell sharply lastweek to the lowest level in more than four and a half years,according government data on Thursday that suggested improvementin the labor market.

Initial claims for state unemployment benefits fell 30,000 toa seasonally adjusted 339,000, the Labor Department said. It wasthe lowest number of new claims since February 2008.

The prior week's figure was revised up to show 2,000 moreapplications than previously reported.

Economists polled by Reuters had forecast claims edging up to370,0000 last week. The four-week moving average for new claims,a better measure of labor market trends, fell 11,500 to 364,000.

A Labor Department analyst said no states had been estimatedfor the latest report.

Recent data on the U.S. labor market has been encouraging.

Employers added a modest 114,000 jobs to their payrolls inSeptember, but the unemployment rate dropped sharply to 7.8percent, the lowest level since President Barack Obama tookoffice.

Obama is in a tight fight with Republican challenger MittRomney less than a month before elections on Nov. 6, and thehealth of the labor market is an important factor for voters.

The claims report showed the number of people still receivingbenefits under regular state programs after an initial week ofaid fell to 3.27 million in the week ended Sept. 29, the latestdata available.

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Keywords: USA ECONOMY/JOBS