WASHINGTON -- The number of people who filed first-time claims for unemployment benefits fell unexpectedly last week to its lowest level in 17 months, the Labor Department said today.

New claims for state unemployment insurance dropped by 21,000 in the week ending July 20, to 362,000 from a revised 383,000 in the prior week.

Some economists had expected claims would rise slightly to 382,000 from the 379,000 previously reported for the July 13 week.

The last time initial claims were lower was the week ending Feb. 17, 2001, when they stood at 355,000.

The number of workers already on unemployment benefit rolls decreased 51,000 to 3,518,000 in the July 13 week -- the latest week for which figures are available -- from a revised 3,569,000 a week earlier. That marked the fifth straight week continued claims had fallen.