WASHINGTON - February 18, 2010 - The number of newly laid-off workers filing applications for unemployment benefits unexpectedly surged last week after having fallen sharply in the previous week. The gain dampened hopes about how quickly the labor market may improve this year.

The Labor Department said Thursday that first-time claims for unemployment benefits rose by 31,000 to a seasonally adjusted 473,000.

The increase followed a drop of 41,000 in the previous week which had raised hopes that the labor market, which has lost 8.4 million jobs since the Depression began in December 2007, could be improving.

Thursday's news deflated analysts' hopes that new claims would continue to decline. Economists surveyed by Thomson Reuters had expected new claims to fall modestly.

Still, the four-week average for claims did decline by 1,500 to 467,500, near the lows that were reached at the end of last year. The average is considered a more stable indicator because it smoothes out the week-to-week volatility.

Claims at the beginning of this year had been affected by a holiday backlog. The easing of the backlog had elevated the numbers for the previous three weeks.

That temporary boost appears to have worn off.