The figure fell 15,000 from the previous week's revised tally of 335,000. The four-week moving average for unemployment claims was 332,000, also the lowest level since late 2007 and a decrease of 4,000 from the previous week's revised average of 336,000.
Although there may be some seasonal adjustment issues related to auto plant shutdowns, initial claims for unemployment insurance have moved lower recently, averaging about 333,000 in the third quarter of 2013, consistent with pre-recession levels of claims, and well below the second quarter average of 345,000, according to the PNC Financial Services Group.
"This is good news but its only part of the story," said Stephen Bronars, senior economist with Welch Consulting, about the Labor Department's figures. "There are still problems in this labor market - in particular how difficult it is to get a job as a new participant in the labor force."
Bronars said "the primary reason" jobless claims are down is because fewer people are being laid off than before.
"You only qualify for unemployment insurance if you were laid off - so recent graduates who can't find a job aren't ever included in new jobless claims," he said.
Companies are leaner than they have been in over a decade, Bronars said.
"The problem we face is that hiring has not picked up. So we could see jobless claims fall to below 300,000 per week and still have an unemployment problem," he said. "As that happens, more and more of the unemployed will be new entrants and re-entrants instead of job losers."
In 2009, at the worst of the recession, 65 percent of the unemployed were job losers.
"Today 52 percent are job losers," Bronars said. "One year from now, unless hiring picks up, the majority of the unemployed will be people who couldn't find a job as they entered the labor force rather than job losers. It is also likely true that many of the discouraged jobless workers, who have given up looking for work, are new entrants and re-entrants not job losers."
"The labor market recovery is continuing, despite recent soft GDP growth, although it remains disappointing," wrote PNC chief economist Stuart Hoffman in a research note.
Hoffman says that with the "ongoing" improvement in the labor market, the Federal Reserve is likely to reduce its $85 billion per month purchases of long-term Treasuries and mortgage-backed securities at either its mid-September or late October meetings. The U.S. central bank has repeatedly said it is watching for a recovery in the labor market to determine whether to end its stimulative measures.
But Hoffman said the Federal Reserve is unlikely to raise the Federal funds rate, the rate at which banks led to each other, until late 2015.
According to the Labor Department, the largest increases in initial claims, unadjusted, for the week ending Aug. 3 were in California, with 3,715 additional claims; Texas (+1,151); Pennsylvania (+999); and Puerto Rico (+816).
The largest decreases were in Oregon, with 1,638 fewer claims; Illinois (-999); and New Jersey (-762).
Earlier this month, the Labor Department reported that the economy added 162,000 jobs in July, fewer than economists expected, lowering the unemployment rate to 7.4 percent.