The U.S. says the number of unemployed workers making initial jobless benefit claims dropped sharply last week to nearly a four-year low, a sign that the country's weak labor market may be improving.

The government said weekly applications for unemployment compensation fell by 50,000 to 352,000, the lowest total since April 2008. It was the biggest weekly drop in the closely watched employment gauge in more than six years.

U.S. hiring improved in the second half of 2011, with employers adding 200,000 jobs in December. For the year, the U.S. economy, the world's largest, added 1.6 million jobs and economists say another 1.9 million could be added this year.

But about 13 million American workers remain unemployed and the country has a long way to go before recovering all the 8.7 million jobs lost in the recession from 2007 to 2009, the worst in the U.S. in seven decades.

The U.S. economy has been advancing, although not as fast as many would like. Economists say the country's overall economic output likely advanced at a 3 percent annual rate in the last three months of 2011. But the economy could slow in the first half of 2012 as concerns persist about the effect of Europe's governmental debt crisis on the U.S., because Europe is one of its major trading partners.

In a separate report, government figures showed that housing construction continues to be one of the worst segments of the U.S. economy, with builders starting just under 607,000 new homes last year. That number is only slightly better than the previous two years and about half the 1.2 million figure economists say represents a healthy housing market.