The number of Americans filing new claims for unemployment benefits fell sharply last week, signaling continued strength in the US labor market, keeping Federal Reserve officials focused on fighting inflation.

The Labor Department reported Thursday that initial claims for state unemployment benefits dropped by 22,000 to a seasonally adjusted 187,000 for the week ended July 18.

Economists polled by Reuters had forecast 212,000 new claims for the same period.

Thursday's report, which covers the survey week for the monthly jobs report for July due in about two weeks, is the latest sign of continued stability in the US labor market.

In contrast, the number of people continuing to receive unemployment benefits, a proxy for hiring, fell to 1.796 million in the week ended July 11.

The unemployment rate unexpectedly fell to 4.2% in June, its lowest in a year, though the decline resulted more from a drop in the labor force than increased hiring.

The US labor market continues to be characterized by an unusual balance of limited labor supply, slow job creation, and low layoff rates, which has helped keep the unemployment rate at historically low levels.

This situation has led many Federal Reserve policymakers to focus more on inflation, which remains well above the 2% target, compared to their concerns about labor market strength.

The Federal Reserve is scheduled to meet next week, with widespread expectations of holding interest rates steady, while futures markets indicate expectations that the central bank will raise rates by at least a quarter of a percentage point before year-end.