FEWER Americans than projected filed applications for unemployment benefits last week, a sign that the job market is sustaining recent gains.

Jobless claims fell by 23,000 to 340,000 in the week ended May 18, Labor Department figures showed yesterday in Washington. The median forecast of 50 economists surveyed by Bloomberg News called for a drop to 345,000. No states were estimated and there was nothing unusual in the data, a department spokesman said.

Falling dismissals could lay the groundwork for a hiring pickup should the economy be able to overcome the federal budget cuts that are projected to curb the expansion. Federal Reserve Chairman Ben S. Bernanke yesterday said the job market is still weak, one reason why policy makers will continue buying bonds in a bid to keep interest rates low and spur growth.

"Some of the encouraging news on the economy has been initial claims, they haven't made a definitive move higher," said Ryan Sweet, senior economist at Moody's Analytics in Pennsylvania. "The hiring has been the missing piece."

Stock-index futures held earlier losses after the report as data showed Chinese manufacturing unexpectedly shrank and equity markets from Europe to Japan tumbled.

Economists' estimates in the Bloomberg News survey ranged from 338,000 to 360,000. The department revised the previous week's figure to 363,000 from an initially reported 360,000.

The four-week moving average, a less volatile measure than the weekly figures, fell to 339,500 last week from 340,000.

Yesterday's report corresponds to the week the department surveys businesses to calculate the May payroll data. The four-week average for May survey period was down from 362,000 in the comparable week in April, when the data turned volatile because of the Easter holiday.

Initial jobless claims reflect weekly firings and tend to fall as job growth, which is measured by the monthly non-farm payrolls report, accelerates.

The number of people continuing to receive jobless benefits fell by 112,000 to 2.91 million in the week ended May 11, the fewest since March 2008, according to the report. The continuing claims figure does not include the number of Americans getting extended benefits under federal programs.