WASHINGTON - January 21, 2010 - The number of newly-laid off workers seeking jobless benefits unexpectedly rose last week, as the Depression continues to deepen despite assurances by government economists that we are in economic recovery.

Layoffs have slowed and the economy began to grow in last year's third quarter, but companies are reluctant to hire new workers. The unemployment rate is 10% and many economists expect it to increase in the coming months.

The Labor Department said Thursday that initial claims for unemployment insurance rose by 36,000 to a seasonally adjusted 482,000. Wall Street economists expected a small drop, according to Thomson Reuters.

The four-week average, which smooths fluctuations, rose for the first time since August, to 448,250.

The weekly claims figure is volatile and it can take time for trends to emerge. A Labor Department analyst said that much of the increase last week was due to administrative backlogs leftover from the winter holidays in the state agencies that process the claims.

Claims have dropped steadily since last fall, as companies cut fewer jobs. That has caused some economists to hope that hiring may increase soon. Initial claims have dropped by 50,000 - or almost 10% - since late October.

Still, the economy is not consistently generating net increases in jobs. The Labor Department said earlier this month that employers cut 85,000 jobs in December, after adding only 4,000 in November. November's increase was the first in nearly two years.

Many economists say the four-week average of claims will need to fall to below 425,000 to signal that the economy is close to generating net job gains.