First-time applications for state unemployment benefits surged 35,000 to a seasonally-adjusted 626,000 in the week ending Jan. 31, the Labor Department said Thursday, posting a 26-year high. "[W]e're starting to get used to these awful numbers, so it doesn't have quite the shock value that it once had, but it's not going to create any buying, that's for sure," Frank Lesh, futures analyst and broker for Futurepath Trading LLC, told Reuters. The total number of Americans receiving state jobless benefits rose 20,000, reaching a record 4.79 million in this reporting period. And the four-week moving average of new jobless claims, which can sometimes smooth volatility, jumped a whopping 44,000 to 4.67 million. The largest increases in initial claims were in Wisconsin -- where 1,355 people filed a claim in the week ending Jan. 24 -- Rhode Island, Virginia, Oklahoma and Puerto Rico. The largest decreases in first time claims were seen in Florida -- dropping by 14,703 -- California, Michigan, Georgia, and Ohio. Despite the Labor Departments ongoing warning in recent weeks that unemployment data was likely to continue its rise, the latest week's numbers are still higher than many analysts expected. Analysts polled by Reuters forecasted 585,000 new claims , while Bloomberg's survey predicted claims would fall to 580,000. It seems companies are still cutting costs to compensate for weak sales, and might continue to do so. Data released Thursday by the Labor Department shows as firms are cutting back on employees' hours, output is suppressed, but productivity growth is rising. Productivity is output divided by hours worked. Productivity gains are supposed to be the key to higher living standards, higher wages, increased profits and low inflation. During the fourth quarter of 2008, hourly compensation climbed a record 15.6 percent as inflation moderated. Write to Kelly Curran at