(Reuters) - The number of Americans claiming new jobless benefits fell to a four-month low last week, a sliver of hope for an economy battered for days by a credit rating downgrade and falling share prices.

The jobless claims data released by the Labor Department on Thursday eased concerns that the economy was heading back into recession as feared by investors, and buoyed U.S. stocks.

Initial claims for state unemployment benefits fell 7,000 to a seasonally adjusted 395,000, the Labor Department said, the lowest level since early April. Economists had expected a reading of 400,000.

"We are not necessarily on the verge of another dip in economic activity," said Millan Mulraine, a senior macro strategist at TD Securities in New York.

"The level of claims at this point is more consistent with at least no deterioration in labor market conditions and at best an economy that is adding jobs at about 200,000 (a month)."

But the optimism generated by the claims report was dampened somewhat by a jump in the trade deficit to $53.1 billion in June, the largest since October 2008, from $50.8 billion in May.

As a result of the wider trade shortfall economists estimated the government could lower the second-quarter's already weak annual growth pace of 1.3 percent to 0.9 percent.

The government will release its second estimate for second-quarter gross domestic product on August 26. The economy grew at a 0.4 percent rate in the first quarter.

The Federal Reserve said on Tuesday economic growth was considerably weaker than expected and unemployment would fall only gradually. The U.S. central bank promised to keep interest rates near zero until at least mid-2013.

Hiring accelerated in July after abruptly slowing in the past two months. However, there are worries that a sharp sell-off in stocks and the nasty fight between Democrats and Republicans over raising the government's debt ceiling could dampen employers' enthusiasm to hire new workers.

DOWNWARD TREND IN CLAIMS

"The key point here is that a clear downward trend in claims has emerged in recent weeks, even as the debt ceiling chaos reached its peak," said Ian Shepherdson, chief U.S. economist at High Frequency Economics in Valhalla, New York.

"We still need to see how the drop in stocks might feed back into claims but with consumers' spending accelerating in recent weeks, why would firms fire more people?"

Stocks have dropped sharply in recent weeks on fears of a new recession, which were exacerbated by Standard & Poor's decision to strip the United States' top notch AAA crediting rating last Friday.

A sovereign debt crisis in Europe has also not helped.

However, U.S. stocks surged on Thursday on the claims data and an improved revenue forecast from Cisco Systems. Sentiment was also boosted as department store chain Kohl's Corp raised its full-year profit forecast.

U.S. stock indexes were up more than 2.5 percent in afternoon trade, while prices for Treasury debt fell. The dollar was marginally weaker against a basket of currencies.

Economists remain cautiously optimistic that the world's largest economy will avoid a double-dip recession, citing declining energy prices and the unwinding of supply chain disruptions from the earthquake in Japan.

An increase in the volume of oil imports pushed the monthly oil import bill in June to its highest since August 2008. That and the second straight month of declines in exports contributed to the wider trade deficit in June.

Imports from China also rose nearly 5 percent to $34.4 billion, lifting the closely watched trade gap with that country to $26.7 billion, the highest in 10 months.

U.S. exports fell for a second consecutive month to $170.9 billion, as shipments to Canada, Mexico, Brazil, Central America, France, China and Japan all declined.

"The sharp drop in exports is a major concern for the economic outlook as it is an indication that the pace of global activity may be slowing appreciably," said TD Securities' Mulraine.

Data on Wednesday showed China's exports hit a record high in July as shipments to Europe and the United States proved surprisingly buoyant. July exports rose 20.4 percent from a year ago, the strongest gain since April.

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