Initial claims for state unemployment benefits increased by 17,000 to a seasonally adjusted 298,000 for the week ended Dec. 27, the Labor Department said on Wednesday. That followed four straight weeks of declines.
Economists polled by Reuters had forecast claims rising to 290,000 last week. Claims are volatile around the Christmas holiday period.
Despite last week's increase, the trend in claims continued to point to a tightening labor market.
The four-week moving average of claims, considered a better measure of labor market trends as it irons out week-to-week volatility, rose only 250 to 290,750 last week. It has remained below the 300,000 mark for 16 straight weeks.
The Conference Board's consumer confidence survey on Tuesday showed households were increasingly upbeat about prospects of securing employment.
The government is expected to report next week that nonfarm payrolls increased 240,000 in December after surging 321,000 in November, according to a Reuters survey of economists.
That would mark the 11th consecutive month of job gains above 200,000, the longest stretch since 1994. The unemployment rate is forecast dipping one-tenth of a percentage point to 5.7 percent, which would be the lowest since June 2008.
The claims report showed the number of people still receiving benefits after an initial week of aid fell 53,000 to 2.35 million in the week ended Dec. 20.