The number of Americans initially applying for unemployment aid last week dropped to the lowest level in four years after remaining at a high level for months, the U.S. Labor Department reported Thursday.

The advance figure for seasonally adjusted initial claims for jobless benefits was 350,000 in the week ending July 7, a decrease of 26,000 from the previous week's revised figure.

Meanwhile, the four-week moving average, which helps smooth out week-to-week volatility, also fell sharply by 9,750 to 376,500.

The number of jobless claims below 375,000 generally indicates a sustained drop in the unemployment rate, bringing hopeful sign for labor market. However, the fresh decline was partly thanks to temporary factors.

U.S. automakers are closing fewer plants than usual in early July, which has resulted in fewer temporary layoffs, and then the applications of unemployment benefits have also declined.

In the past three months, employers added an average of only 96,000 jobs per month, far less than an average of over 250,000 in the previous three months. The unemployment rate still remained at painfully high of 8.2 percent in June.

The advance figure for seasonally adjusted insured unemployment during the week ending June 30 was 3.304 million, down 14,000 from the prior week.

The U.S. economy only expanded at an annual rate of 1.9 percent in the first quarter of 2012. The Federal Reserve also expected that the unemployment rate would not fall much further this year than it had already.