WASHINGTON (MarketWatch) - The number of people who applied for unemployment benefits fell by 20,000 to 331,000 in the week ended Feb. 1, a sign the U.S. labor market continues to gradually improve. Economists surveyed by MarketWatch expected claims to drop to 337,000 on a seasonally adjusted basis. The average of new claims over the past month, a more reliable gauge than the volatile weekly number, edged down by 250 to 334,000, the Labor Department said Thursday. Also, the government said continuing claims rose by 15,000 to a seasonally adjusted 2.96 million in the week ended Jan 25. Continuing claims reflect the number of people already receiving benefits. Initial claims from two weeks ago, meanwhile, were revised up to 351,000 from an original reading of 348,000, based on more complete data.