Despite the increase, claims have fallen steadily since this summer, a sign that job cuts are slowing and hiring could pick up as soon as early next year amid a broad economic recovery.
Initial claims for unemployment insurance rose by 17,000 to a seasonally adjusted 474,000, the Labor Department said Thursday. That was above analysts' expectations of 460,000 new claims.
Claims were partly inflated by a surge following the Thanksgiving holiday week, when many state unemployment offices are closed, a department analyst said. Seasonal layoffs in the construction industry also played a role.
Economists closely monitor initial claims, which are considered a gauge of the pace of layoffs and an indication of companies' willingness to hire new workers.
The four-week average of claims, which smooths fluctuations, fell to 473,750, its 14th straight decline and the lowest level since September 2008.
Still, claims will have to fall to about 425,000 for several weeks to signal the economy is actually adding jobs, according to many economists.
The number of people continuing to claim benefits fell by 303,000 to 5.16 million, the lowest level since February. The total unemployment benefit rolls have fallen in 11 of the past 12 weeks.
But the so-called continuing claims do not include millions of people that have used up the regular 26 weeks of benefits typically provided by states, and are receiving extended benefits for up to 73 additional weeks, paid for by the federal government.
About 4.6 million people were receiving extended benefits in the week ended Nov. 21, the latest data available. That's an increase of about 130,000 from the previous week, and is partly due to an extension of benefits that Congress enacted last month.
The economy grew at a 2.8 percent pace in the July-September quarter and analysts say it is likely growing at a similar pace in the current quarter. But that is much slower than the average 6 percent rate in previous economic recoveries.
As a result, most economists expect the unemployment rate to rise in coming months and remain above 9 percent through the end of next year.
Federal Reserve Chairman Ben Bernanke said Monday that he expects "modest" economic growth next year. That should help push down the nation's unemployment rate - now at 10 percent - "but at a pace slower than we would like," he acknowledged.
The Labor Department last week said employers shed 11,000 jobs in November, much better than economists expected and below the 111,000 lost the previous month.
Some employers are continuing to lay off workers. Consol Energy said Tuesday that it will lay off nearly 500 workers and idle a mountaintop removal mining operation near Bickmore, W.Va. The Pittsburgh-based company blamed an environmental lawsuit.
The Los Angeles School Board on Tuesday approved a budget plan that would cut 5,000 jobs, including about 1,400 teachers.
Among the states, the largest increases in initial claims was in Wisconsin, at 8,067, which it attributed to layoffs in construction and manufacturing industries. The state data lag initial claims by a week.
The next largest increases in claims were in Kansas, Missouri, Iowa and Indiana.
California reported the largest drop in claims, down 28,672, which it attributed to fewer layoffs in the service industry. Texas, North Carolina, Florida and Illinois had the next largest drops.
