Initial claims for state unemployment benefits dipped 1,000 to a seasonally adjusted 404,000, the Labor Department has said, just below economists' expectations for 405,000.
A separate report from the Commerce Department on the trade balance confirmed the economy avoided a recession in the third quarter, with the growth pace expected to have accelerated from the April-June period's anaemic 1.3 per cent rate.
"These reports add to the recent flow of encouraging economic releases, which have been pointing to an economy that has not only averted a second recession, but one that may be slowly regaining some positive momentum," said Millan Mulraine, senior macro strategist at TD Securities in New York.
Reports ranging from manufacturing to employment suggest the economy continues to plod along, but Europe's inability to get to grips with its debt crisis poses a threat and analysts warn it could drag the US into a new recession.
Data last week showed nonfarm employment increased 103,000 in September after rising 57,000 the prior month.
While payrolls last month were lifted by the return of 45,000 Verizon Communications workers, key measures of labour market health showed some improvement.
Stocks on Wall Street fell as investors focused on weaker-than-expected economic data in China. Prices for US Treasury debt rallied and the dollar advanced against a basket of currencies.
The US trade deficit edged down to $45.6bn (£29.1bn) in August from $45.6bn the prior month. Economists said trade could add as much 0.4 percentage point to third-quarter gross domestic product.
"It seems that the technical rebound of the US economy that we have been expecting for months has materialised after all, despite the gloomy messages sent by survey-based confidence indicators," said Harm Bandholz chief US economist at UniCredit in New York.