WASHINGTON - January 13, 2011 - More people applied for unemployment benefits last week after retailers shed temporary holiday employees.

The Labor Department says the number of people seeking benefits jumped by 35,000 to a seasonally adjusted 445,000 for the week ending January 8. It was the highest level since late October.

The increase comes after applications had fallen to their lowest levels in two years over the winter holidays. Applications usually rise in early January once the holiday season ends.

Fewer than 425,000 people applying for jobless benefits is consistent with modest job growth. The number of people seeking benefits has fallen steeply since reaching 651,000 in March 2009. Still, economists say applications will have to fall to 375,000 or below to signal a sustained decline in the unemployment rate.