New claims for unemployment benefits fell by 11,000 last week, an unexpectedly large decline that provided new evidence of the strength of the U.S. economy.

The Labor Department said Thursday that 308,000 Americans filed initial claims for unemployment benefits for the week ending last Friday, down from 319,000 the previous week.The 11,000 decline was an unexpected improvement. Many economists had been predicting that claims would rise on the belief that the economy is slowing in the current spring quarter.

The Federal Reserve, which will meet in two weeks to review interest rates, had been expecting the adverse effects of the Asian crisis to slow economic growth to a slower pace from the sizzling 4.2 percent growth rate turned in during the first three months of the year.

However, various recent indicators have shown unexpected strength, raising concerns in financial markets that the Fed may soon be forced to start raising interest rates to slow U.S. growth and keep inflationary pressures at bay.

A key indicator the Fed will be watching is Friday's report on unemployment for April. The previous report showed that unemployment edged up to 4.7 percent in March as payroll jobs shrank by 36,000, the first such decline in more than two years.