The Labor Department says weekly applications dropped 26,000 to a seasonally adjusted 350,000, the lowest level since March 2008. The four-week average fell to 376,500.
When applications consistently fall below 375,000, it generally suggests hiring is strong enough to reduce the unemployment rate.
Still, special factors affected the report. Automakers have traditionally closed their plants for the first two weeks in July to prepare them to build new car models. But this year they are limiting the shutdowns to boost production. That resulted in fewer temporary layoffs than is normally the case in early July.