The 4-week moving average of initial claims was 440,750, down 9,000 from the previous week's revised average of 449,750.
"For just one week, it's a tick in the wrong direction," said Tim Quinlan, an economic analyst at Wells Fargo. "But the four-week moving average, at its lowest level since fall of 2008, tells me that we're moving in the right direction."
There were 801,086 unadjusted initial claims, nearly double the seasonally adjusted figure mostly due to the number of temporary workers typically hired during the holidays.
"Any time you get around [this time of year] you can start talking about things like layoffs for retail shopping," said Quinlan.
Despite the rise, he predicts there will be significant job growth in 2010.
"In general, I think that the bulk of layoffs are behind us," he said. "I expect payroll growth to increase starting in the first quarter of the year and to gradually improve throughout the course of 2010."
He cautioned that there could be a blip of a rise in jobless claims in May due to the temporary hiring of census workers.
Continuing claims: The government said 4,596,000 people had filed continuing claims in the week ended Jan. 2, the most recent data available. That's down 211,000 from the preceding week's revised 4,807,000 claims.
The 4-week moving average for ongoing claims fell by 151,500 to 4,855,000 from the previous week's revised 5,006,500.
But the decline may just mean that more filers are dropping off those rolls into extended benefits.
Continuing claims reflect people filing each week after their initial claim until the end of their standard benefits, which usually last 26 weeks. The figures do not include those people who have moved to state or federal extensions, or people whose benefits have expired.
In November, Congress passed a record-long extension of federally paid benefits up to 99 weeks. But the law only helps those who use up their unemployment lifelines by the year's end, so depending on the state, not everyone will receive benefits for the entire 99-week span.
The House and the Senate passed measures in December to extend the filing deadline through the end of February.
Lawmakers in both chambers had initially introduced bills to push the deadline to apply for benefits as far back as 2011, but House Democratic leaders compromised the effort in order to speed up the process of getting the bill through the Senate.
State-by-state: Unemployment claims in six states dropped more than 1,000 for the week ended Jan. 2, the most recent data available. Claims in Illinois fell the most, by 6,928, which the state said was due to fewer layoffs in construction, trade and manufacturing industries.
A total of 18 states said the claims rose by more than 1,000. Claims in New York jumped the most, by 22,810, which the state attributed to layoffs in the construction, service and transportation industries.
TN unemployment fund may need a loanJobless claims fall to 17-month low
