WASHINGTON (Reuters) - The number of U.S. workers filing new claims for jobless benefits dipped by 1,000 last week, while the number collecting long-term aid fell to the lowest reading in seven months as the job market steadied.

Initial claims for state unemployment insurance declined, though the number was higher than expected, to a seasonally adjusted 530,000 in the week ended October 24, the Labor Department said. Analysts polled by Reuters had forecast claims to fall to 521,000 last week from 531,000.

Continued claims of people still on jobless aid after an initial week of benefits slid by 148,000 to 5.797 million in the week ending October 17, the latest for which data is available. It was the lowest reading since March.

Analysts had forecast continued claims would be 5.90 million. This better-than-expected performance chimed with forecasts for labor market conditions to stabilize as the country pulls out of the worst recession in 70 years.

A Labor Department official said that there were no special factors influencing the data last week and that no states had submitted estimates for their count.

Another key gauge of underlying labor market health, the 4-week moving average for new claims, decreased by 6,000 to 526,250, which was the smallest reading since January.

This measure is closely watched because it is supposed to iron out weekly volatility. It has now declined for eight straight weeks, in further evidence that the jobs market is slowly beginning to heal.

(Reporting by Alister Bull, Editing by Chizu Nomiyama)