Initial U.S. jobless claims decreased 9,000 to 365,000 for the week ended May 17 - - slightly below the consensus estimate, the U.S. Labor Department announced Thursday. Claims for the previous week were revised 4,000 higher to 374,000.

Economists surveyed by Bloomberg News had expected this week's initial jobless claims to total 370,000.

Also, the 4-week moving average increased 5,000 to 372,250. Economists view the 4-week average as a better indicator of unemployment conditions, as it smooths-out anomalies for strikes, holidays, or other idiosyncratic events.

Economist Peter Dawson said this week's job report, "shows that although we're not seeing large weekly layoffs, the length of time individuals are spending looking for employment is increasing, which is indicative of soft job creation conditions."

The largest increases in initial claims for the week ending May 10 were in Michigan, +6,637, North Carolina, +3,344, Georgia, +2,202, Mississippi, +1,804, and Louisiana, +1,489. The largest decreases were in New York, -15,244, Kentucky, -4,391, Wisconsin,-1,514, Pennsylvania, -1,149, and Oregon, -1,144.

Meanwhile, the number of continuing claims was unchanged at 3.073 million from a revised 3.073 million for the week ended May 10, the latest period for which figures were available. The 3.073 million total was the highest continuing claims level since March 2004.

Economic Analysis: A mixed weekly jobless report. Weekly claims were below the consensus estimate, but the 4-week moving average continues to rise. It is still at an elevated level, and above the U.S. Federal Reserve's 'danger level' of 350,000. Further, the continuing claims total remains over 3 million - - an indication of a soft job market, as Dawson noted. That statistic, combined with an elevated 4-week average, indicates that labor market conditions are not improving - - a major negative for the U.S. economy.