New claims for US unemployment benefits dropped last week to a level last seen more than three years ago, government data showed Thursday in a sign of stabilization in the troubled jobs market. Initial jobless claims fell by 19,000 in the week ending December 10 from the prior week, to 366,000, the Labor Department said. \"This is unexpectedly great news. If claims can remain at this level, payroll growth will strengthen markedly within a month or so,\" said Ian Shepherdson, chief US economist at High Frequency Economics. The downward trend in weekly claims has signaled an improvement in the labor market, where the unemployment rate fell to 8.6 percent in November from 9.0 percent in October. The department upwardly revised the prior week\'s reading to 385,000 from a first estimate of 381,000. Last week\'s claims were the lowest since the 366,000 reading in the week ending May 10, 2008. According to the Labor Department\'s four-week moving average, which helps to smooth volatility, initial jobless claims fell by 6,500 to 387,750 last week. Analysts warned that claims readings during the year-end holiday season typically are more volatile than in the rest of the year. But they welcomed the improvement that could boost economic growth in the fourth quarter. \"The latest unemployment claims readings are among the most promising signs in the recovery to date that the labor market may be seeing an uptick in job creation,\" RDQ Economics analysts said in a research note. However, lackluster hiring as employers are reluctant to add jobs amid economic uncertainty remained a key obstacle to recovery in the labor market. \"Policy measures designed to make adding workers more appealing, including communication from the Federal Reserve that it will hold interest rates at a low level and legislation from President (Barack) Obama to encourage hiring, will help the labor market move toward accelerating growth,\" said Sara Kline at Moody\'s Analytics.