WASHINGTON (AP) -- The number of newly laid off workers filing claims for unemployment benefits unexpectedly rose last week as the recovery of the nation&S217;s battered labor market proceeds in fits and starts.

The Labor Department said Thursday that the number of new jobless claims rose to 480,000 last week, up 7,000 from the previous week. Economists had expected a decline to 465,000.

The four-week average for claims, which smoothes out fluctuations, did fall, however, dipping to 467,500, the 15th straight decline, viewed as an encouraging sign that the labor market is gradually improving. The four-week average is now at its lowest point since late September 2008, the period when the financial crisis was hitting with full force.

Unemployment claims have been on a downward trend since this summer. That improvement is seen as a sign that jobs cuts are slowing and hiring could pick up as soon as early next year. But the rise in weekly claims of 7,000 last week, which had followed an increase of 19,000 the previous week, shows that the improvement has been halting.

Economists closely monitor jobless claims, which are considered a crucial gauge of the pace of layoffs with continuing claims viewed as an indication of how quickly laid off workers are getting new jobs.

Analysts believe that claims need to fall to about 425,000 for several weeks to signal the economy is beginning to add jobs business cards.

The government said that the number of people receiving regular benefits rose 5,000 to 5.19 million for the week ended on Saturday. That figure does not include millions of people who have used up the regular 26 weeks of benefits typically provided by the state and are now receiving extended benefits for up to 73 additional weeks, paid for by the federal government.

The people receiving extended benefits jumped to 4.73 million for the week ended Nov. 28, an increase of 143,759 from the previous week. That big rise reflected the fact that a total of 17 states are now processing claims for the extended benefits that Congress approved last month.

There were 29 states with increases of more than 1,000 claims for the week ending Dec. 5 led by California, with a rise of 28,353, which it attributed in part to the fact that the unemployment offices were open for the full week giving applicants more time to file after the Thanksgiving holiday. Other states with big gains were Georgia, New York, North Carolina and Pennsylvania.

The two states with declines of more than 1,000 were Kansas, with a drop of 3,803, and Kentucky, down by 2,048.

First-Time Jobless Filings Rise Unexpectedly