U.S. jobless claims up, continued claims hit record

The Labor Department said initial claims for state unemployment insurance benefits increased to a seasonally adjusted 654,000 in the week ended March 7, from a revised 645,000 the week before.

Analysts polled by Reuters had forecast 645,000 new claims versus a previously reported count of 639,000 the week before.

The Labor Department said it was the highest initial claims reading since the week of February 21, when they hit 670,000.

The number of people remaining on the benefits roll after drawing an initial week of aid mounted by 193,000 to a record 5.317 million in the week ended Feb 28, the most recent week for which data is available. Analysts had estimated so-called continued claims would be 5.130 million.

The sharp increase in continued claims also pushed the insured unemployment rate to 4 percent from 3.8 percent in the week before, the highest reading since June 1983.

A Labor Department official said there were no special factors impacting the data, and that no states' claims data had been estimated.

The four-week average of new jobless claims, a better gauge of underlying trends as it irons out week-to-week volatility, rose to 650,000 from 643,250 the week before. This was the highest reading since October 1982, when claims were 656,250.

The U.S. recession has already destroyed over 4 million jobs since it began in December 2007, pushing the unemployment rate to 8.1 percent. Economists fear this level could pierce 10 percent next year as the jobs climate continues to chill.

(Reporting by Alister Bull; Editing by Chizu Nomiyama)