The number of applications for unemployment benefits thus reached 778,000.
Personal income fell last month and is expected to decline further due to the loss of unemployment benefits funded by the government as part of the stimulus package it launched the day after Christmas.
However, the economy made a strong start in the fourth quarter and consumer spending and business investment beat expectations for October.
Consumer spending, which contributes to more than two-thirds of US economic activity, rose 0.5% last month after rising 1.2% in September.
Orders for non-military capital goods other than aircraft, a popular indicator of touching corporate spending plans, rose 0.7% last month.