Fewer Americans than projected filed applications for unemployment benefits last week, indicating the U.S. labor market is improving.

Jobless claims declined by 42,000 to 338,000 in the week ended Dec. 21, a Labor Department report showed today in Washington. The median forecast of 42 economists surveyed by Bloomberg called for a drop to 345,000. Continuing claims rose.

The year-end holidays make it difficult to adjust for fluctuations in applications for jobless benefits, a Labor Department official said as the figures were released. Other data show a pickup in employment is helping boost personal spending, which accounts for almost 70 percent of the economy.

“Companies have been holding on to workers and are now a getting a bit more active on hiring,” said Omair Sharif, an economist at RBS Securities Inc. in Stamford, Connecticut, who projected 340,000 claims.

Economists’ estimates in the Bloomberg survey ranged from claims of 310,000 to 365,000. In the prior week, claims rose to a revised 380,000 from a previously reported 379,000.

Stock-index futures held gains after the figures. The contract on the Standard & Poor’s 500 Index expiring in March rose 0.2 percent to 1,832.3 at 8:47 a.m. in New York.

The jobless claims report showed the four-week moving average, a less volatile measure than the weekly figures, rose to 348,000 last week from 343,750.

Continuing Claims

The number of people continuing to receive jobless benefits increased by 46,000 to 2.92 million in the week ended Dec. 14, the highest since August. The continuing claims figure does not include the number of Americans receiving extended benefits under federal programs.

Those who’ve used up their traditional benefits and are now collecting emergency and extended payments decreased by about 40,700 to 1.33 million in the week ended Dec. 7.

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