The Labor Department said Thursday that the number of initial jobless benefit claims dropped to a seasonally-adjusted 623,000, from an upwardly revised figure of 631,000 the previous week. The latest tally still was above analysts' expectations of 610,000 claims.
And in a sign that laid-off workers are having difficulty finding new work, the number of people claiming benefits for more than one week rose to 4.81 million from 4.78 million, the highest total since records began in 1967. The continuing claims data lag new claims by a week.
An additional 1.5 million people are receiving benefits under an extended unemployment compensation program approved by Congress last year, bringing the total number of recipients to 6.3 million.
Continuing claims are up sharply from a year ago, when the figure was 2.7 million.
In slightly better economic news, the Commerce Department reported Thursday thatin January, reversing six months of decline and defying expectations of a 0.8 percent drop.
The rise in sales follows a 2.7 percent plunge in December, which marked the weakest holiday selling season since at least 1969.
The 631,000 new jobless claims filed two weeks ago was the highest tally since October 1982, when the economy was emerging from a steep recession, though the labor force has grown by about half since then.
The four-week average of claims, which smooths out fluctuations, rose by 24,000 to 607,500, the first time that figure has topped 600,000 in the current recession.
Economists consider jobless claims a timely, if volatile, indicator of the health of the labor markets and broader economy. A year ago, initial claims stood at 339,000.
Companies from a range of sectors are hemorrhaging jobs as the recession worsens. Consumers have cut back on their spending in response to declining home values and plummeting stock portfolios, and businesses also are tightening their belts.
On Wednesday, Boston-based money manager
Among the states, California saw the biggest increase in jobless claims, a jump of 20,000 that it attributed to layoffs in construction and service industries. The next largest increases were in: North Carolina, with 8,663; Ohio, with 4,738; Georgia's 4,392; and Kansas, with 3,232.
Virginia saw the largest drop in claims, a decline of 1,937, which it attributed to fewer layoffs in manufacturing. Drops of 1,00 or more also were reported in New Jersey, Missouri, Oklahoma and Connecticut.
On Wednesday, lawmakers announced aon an $789 billion economic stimulus package that the Obama administration pledged would save or create 4 million jobs over two years.