By Nancy Waitz WASHINGTON, Feb 21 - The recovering U.S. labor market suffered a setback in the pre-holiday week, as 10,000 more Americans put in bids for first-time jobless benefits, a government report showed on Thursday. The Labor Department said first-time jobless claims -- a guide to the job market and the pace of layoffs -- rose to 383,000 in the week ended Feb. 16 from 373,000 the week before. Wall Street economists had expected claims to match the prior week's rate. The U.S. dollar eased off session highs versus the Japanese yen after the higher-than-expected number while U.S. Treasuries trimmed their losses. However, a Labor Department spokesman said data released in a holiday-shortened week -- the government was closed Feb. 18 for Presidents Day -- are often subject to a larger-than-typical revision the next week because with a holiday Monday, the department has one fewer day to collect and process numbers than normal. A more reliable barometer of employment market trends, the closely watched four-week moving average, which irons out week-to-week volatility, rose for the first time in five weeks to 381,750 in the Feb. 16 week, up from 376,000 the prior week and the highest since 386,000 in the Jan. 26 week. Claims have remained below the 400,000 mark for the past seven weeks, and are sharply off peaks that topped 500,000 after the Sept. 11 attacks. When claims rise above 400,000, it is seen as a signal the U.S. unemployment rate will rise. The number of workers continuing to file for benefits rose 44,000 to 3.5 million in the week ended Feb. 9, the latest week for which data were available, from a revised 3.46 million the prior week. Continued claims breached the 3.5 million mark for the first time since Jan. 5 when they measured 3.52 million. In the week ended Feb. 9 -- the latest for which state-by-state figures are available -- the department said six states reported a decrease in claims exceeding 1,000. Four states reported an increase in claims of 1,000 or more, led by Michigan with 6,387 additional claims in the automobile industry.