First-time claims for unemployment fell to 365,000 for the week ended September 1, the Labor Department reported Thursday, surprising economists who had expected a smaller decline to 370,000.

The number of filings in the previous week was revised up to 377,000 from the originally reported 374,000.

Continuing claims – reported on a one-week lag – dropped 3,500 to 3,322,000 from the prior week’s 3,328,000, revised from the originally reported 3,316,000.

This week’s reports will not affect the Employment Situation report to be released Friday by the Bureau of Labor Statistics.

The report – tracking the nation’s unemployment rate and job creation – is compiled based on payroll and household surveys for the week of the month including the 12th calendar day.

From mid-July to mid-August, initial claims dropped 14,000 but continuing claims – which more closely tracks job creation – increased 37,000.

The week-over-week change in first time claims – 12,000 – was the largest week-week decline in six weeks when reports of initial claims were erratic and affected by changes in the auto industry.

This week’s report too benefited from seasonal adjustment factors which are used to account for known and predictable changes in raw data. Indeed, the “unadjusted” claims fell to 307,831 – far below the 348,582 “unadjusted” claims in the same week last year.

The raw data would include individuals who returned to work after temporary summer layoffs.

The upward adjustment to the prior week’s report was not unexpected: it was the 31st time this year the preliminary data was revised higher.

The four-week moving average of first time claims increased to 371,250, up from 371,000 one week earlier and the fourth consecutive increase.

The four-week moving average of continuing claims fell 3,500 to 3,320,750 from 3,324,750 which had been the highest level since the beginning of April.

The total number of people claiming benefits in all programs – reported on two week lag – for the week ending August 18 was 5,467,752, a decrease of 63,076 from the previous week.

Most of the decline – 52,433 – came in state programs (as opposed to federally funded emergency or extended benefits).

State programs have been shaved due to state budget pressures and the depletion of state unemployment insurance trust funds.

States have been borrowing from the federal government to cover shortfalls in those funds which will eventually have to be repaid – unless Congress intervenes – with higher assessments on employers.

Since those assessments are a percentage of payrolls, they discourage employers from adding new workers.

States reported 2,263,614 persons claiming Emergency Unemployment Compensation benefits for the week ending August 18, a decrease of 9,703 from the prior week, the Labor Department said. There were 3,060,622 persons claiming EUC in the comparable week in 2011.

According to the Labor Department detail, also reported on a one-week lag the largest increases in initial claims for the week ending August 25 were in New York (+3,110), North Carolina (+1,237), Georgia (+1,039), Massachusetts (+731), and Ohio (+631), while the largest decreases were in California (-1,757), Pennsylvania (-1,273), Michigan (-1,203), Florida (-844), and South Carolina (-787).