First-Time Jobless Claims Hit a Two-Year Low : Employment: Number seeking state benefits falls for the third straight week.

The number of Americans filing first-time claims for state unemployment benefits fell for the third straight week to the lowest level in more than two years, the Labor Department said Thursday.

Initial state claims fell 5,000 to 355,000 after seasonal adjustment in the week ended Oct. 31. Not since the beginning of the recession have claims been that low. They numbered 354,000 in the week ended Aug. 4, 1990, the department said.

Fewer people also filed new claims for jobless benefits under the emergency federal program--down 2,628 to 20,869 before seasonal adjustment in the latest week.

Michael Evans, head of the Washington consulting firm Evans Economics, said the decline in new claims shows that the labor market is crawling back to health.

“Over the past six weeks, claims are down 69,000. When you are in the 350,000 range, you’re in recovery, so we are real close,” Evans said.

Edward Kelley, Federal Reserve board governor, said Thursday that other recent economic statistics also reflect an improving economy.

“We’ve got an expansion that is clearly in place. We are still moving forward more sluggishly than we’d like but, nevertheless, moving forward,” he told reporters after a speech at the Georgetown University Law Center.

In a separate report Thursday, the Commerce Department said the number of houses built nationwide in September fell 1.7%, against a revised August drop of 7.2%, pointing to a still-sluggish market.

Kathryn Kobe, economist at Joel Popkin & Co. in Washington, said there are still some rocky patches ahead for the labor market.

Corporate restructurings are not yet over, she said, citing plans at Bell South Corp. and General Motors Corp. for more layoffs.

“The economy is still weak and will grow very, very slowly,” Kobe said. But she called the weekly jobless figures “a teeny, tiny little light of good news.”

The monthly unemployment report for October, released last week, showed a stalled labor market.

The jobless rate dipped one percentage point to 7.4%, but it was largely because of a shrinkage in the number of people in the labor force. An insignificant number of new jobs were created in October.

Unemployed Americans face problems getting jobs--3,008,000 people are already receiving state jobless benefits and 1.5 million more who have exhausted state benefits are on federal emergency rolls.

The Labor Department said the four-week moving average of new claims, which gives a better picture of longer-term trends than the more-volatile weekly figures, also declined for a fifth straight week, to 364,500 from 371,500.

States with the largest decreases in new claims before seasonal adjustment were Ohio, down 2,914, Missouri, down 1,748, and New York, down 1,146.

Illinois reported 1,354 new claims because of layoffs in trade, service and manufacturing. Michigan’s new claims rose 2,666 because of auto industry layoffs.