New jobless claims up more than expected

Employers Jeff Ouellette (L) with Technical Needs and Jennifer Matt-Rivers (C) with Sovereign Bank wait while a job seeker (R) fills out an application at a job fair organized by the New Hampshire Employment Security agency in Salem, New Hampshire December 17, 2008.

WASHINGTON (Reuters) - The number of workers filing new claims for unemployment benefits rebounded last week after a brief holiday-induced slowdown, government data showed on Thursday, suggesting that the year-long recession was deepening.

Initial claims for state unemployment insurance benefits rose 54,000 to a seasonally adjusted 524,000 in the week ended January 10 from an upwardly revised 470,000 the prior week, the Labor Department said.

It was the highest reading for initial claims since the week ending December20, when new applications for unemployment aid were 589,000. A Labor Department official said seasonal adjustment factors anticipated this would be the highest week of year for unadjusted claims. Last week was the first of three weeks without a holiday.

Analysts polled by Reuters had forecast 500,000 new claims versus a previously reported figure of 467,000.

The number of people staying on the benefits roll after drawing an initial week of aid fell 115,000 to 4.497 million in the week ended January 3, the latest week for which the data is available, from 4.612 million the previous week. This was the lowest reading since the week ending December 13. The four-week moving average for continuing claims, at 4.498 million, was the highest in 26 years.

(Reporting by Lucia Mutikani; Editing by Neil Stempleman)