The number of Americans filing first-time unemployment claims fell 33,000 from last week to 779,000, the Labor Department said Thursday.
Analysts expected 830,000 for the week ending Jan. 30, while the previous week's number was revised down by 35,000 from 847,000 to 812,000.
Despite the fall in claims, there are still more than 10 million jobless Americans since the coronavirus pandemic-hit US economy shed 22 million jobs in March and April.
Private American companies, on the other hand, added 174,000 jobs in January, as private payrolls recovered from a 123,000 fall in December when they marked the first monthly decline since April.
Services sectors added 156,000 jobs last month, with health care leading the way with 48,000, according to ADP Research Institute’s national employment report released Wednesday.
"Although job losses were previously concentrated among small and midsized businesses, we are now seeing signs of the prolonged impact of the pandemic on large companies as well," Ahu Yildirmaz, vice president and co-head, said in a statement.
President Joe Biden, meanwhile, is still struggling to find support for his $1.9 trillion relief bill as it failed to find traction among Republican lawmakers.
Democrats in the House of Representatives voted 218-212 Wednesday with no Republican support to approve a budget resolution that may allow the bill to pass the Senate, which is expected to take up the same legislation later this week.
Biden's stimulus package includes $1,400 direct checks for Americans, federal unemployment payments of $400 a week and funding for state and local governments.
