The number of U.S. workers filing new applications for unemployment insurance unexpectedly surged last week, a government report showed on Thursday, dealing a setback to hopes the economy was on the verge of job growth.

Initial claims for state unemployment benefits increased 31,000 to a seasonally adjusted 473,000 in the week ended February 13, up from an upwardly revised 442,000 the prior week, the Labor Department said.

Analysts polled by Reuters had expected claims to drop to 430,000. The prior week was initially reported as 440,000.

A Labor Department official said the weather did not deter people from filing claims because at least 95 percent of initial claims are now filed on line or by telephone. Claims for four states, including California and Texas, were estimated. Two blizzards slammed the Mid-Atlantic region last week, dropping record snow, and brought the region to a standstill.

Last week was the survey week for the employment report for February, which is scheduled for release in early March.

The labor market, hardest hit by the worst recession in seven decades, has lagged the economic recovery that started in the second half of 2009. The economy has lost 8.4 million jobs since the start of the downturn in December 2007. However, the pace of layoffs has dropped sharply from early last year.

The four-week moving average of new claims, which irons out week-to-week volatility, fell 1,500 to 467,500, the Labor Department said. The number of people still receiving for benefits after an initial week of aid was unchanged at 4.56 million in the week ended February 6.

This measure has held below the 5 million mark for eight straight weeks and analysts believe it is starting to reflect an improvement in the labor market rather than people merely dropping off rolls because they have exhausted their benefits.

(Reporting by Lucia Mutikani; Editing by Neil Stempleman)

California Unemployment