New jobless claims rise more than expected

With layoffs spreading, the number of initial claims for jobless benefits rose last week, while the total number of people continuing to receive benefits set a record high, the government said Thursday.

The Labor Department reported that first-time requests for unemployment insurance rose to 654,000 from the previous week’s upwardly revised figure of 645,000, above analysts’ expectations.

The number of people receiving benefits for more than a week increased by 193,000 to 5.3 million, the most on records dating to 1967. That’s the sixth time in the last seven weeks that the jobless claims rolls have set a record high.

The labor market has been hammered as employers, squeezed by cutbacks in consumer and business spending, shed jobs at a rapid pace. Some economists say the U.S. unemployment rate could reach 10% by the end of this year, from its current level of 8.1%.

The four-week average of new claims, which smooths out fluctuations, rose to 650,000, the most in more than 26 years, though the workforce has grown by about half since then.

As a proportion of the workforce, the tally of Americans receiving unemployment benefits is the highest since June 1983, the department said.