First-time filings for state unemployment benefits dropped by 35,000 to 355,000 in the week ending Oct. 15, the Labor Department said Thursday. It's the lowest level of initial claims since the week of Sept. 3. About 40,000 of last week's new claims were related to Hurricanes Katrina and Rita, a Labor Department spokesman said, bringing the storms' cumulative total to 478,000 new claims. The four-week average of initial claims fell by 20,000 to 376,000, also the lowest since the week Katrina hit. The figure was slightly less than the 364,000 expected by economists surveyed by MarketWatch. The latest data coincide with the week the Labor Department surveys businesses and households for the monthly jobs report. In September, payrolls fell by 35,000, with about 230,000 jobs lost to the storms offsetting gains elsewhere. The jobless claims data indicate that a similar loss of jobs could be expected in the October data, which will be reported on Nov. 4. The estimates of the storms' impact on initial claims show that labor markets in the rest of the country have been little affected by the storms, with underlying initial claims staying in the 300,000 to 320,000 range that prevailed before the storms. Meanwhile, the number of Americans collecting jobless benefits rose by 36,000 to 2.89 million in the week ending Oct. 8, the most since August 2004. Continuing claims are up by about 300,000 since Katrina devastated the Gulf Coast on Aug. 29. The insured unemployment rate - the proportion of eligible workers who are receiving benefits - rose by a tenth to 2.3%. In Louisiana, the insured unemployment rate was 10.8%, while it was 6.8% in Mississippi.