enlarge The Associated Press

Thousands of job seekers wait in lines for buses to a job fair at the Mall of New Hampshire parking lot in Manchester, N.H., on Thursday. There were so many people that traffic was backed up for miles, and organizers had to cut off admission to the event after just two hours.

WASHINGTON — New jobless claims fell more than expected last week but are stuck at elevated levels, while the number of people continuing to receive unemployment insurance approached 6 million, setting a record for the 10th straight week.

The government data released Thursday bolster recent projections from the Federal Reserve and private economists that the nation's job market will remain weak into next year as companies purge thousands more workers.

The Labor Department said the tally of initial jobless claims fell to a seasonally adjusted 654,000, down from a revised 674,000 the previous week. Analysts expected claims to drop to 660,000.

But the total number of laid-off Americans receiving unemployment rose to 5.84 million, from 5.75 million. That was the most on records dating from 1967 and higher than analysts expected.

The data show "no hint of a slowdown in job losses," John Ryding, chief economist at RDQ Economics, wrote in a note to clients.

The four-week average of jobless claims, which smooths out fluctuations, fell slightly to 657,250, the first drop after 11 straight increases, according to the Labor Department.

Still, the declines are from very high levels. The 674,000 figure was the highest number of initial claims in the current recession and the most in 26 years, though the labor market has grown by half since then.

Initial claims reflect the pace of layoffs by companies and are considered a timely, if volatile, measure of the economy. A year ago, claims stood at 358,000.

The 5.84 million continuing claims lag the initial claims data by a week and don't include 1.54 million Americans who received benefits under an extended unemployment compensation program approved by Congress last year. That adds 20 to 33 weeks of benefits to the typical 26 weeks provided by states.

The high level of continuing claims is a sign that many laid-off workers are having difficulty finding new jobs.

The Fed expects the unemployment rate – now at a quarter-century high of 8.5 percent – will probably "rise more steeply into early next year before flattening out at a high level over the rest of the year," according to minutes from the central bank's March meeting. Many private economists expect the rate will hit 10 percent by year's end.

The U.S. has lost a net total of 5.1 million jobs since the recession began in December 2007, almost two-thirds of them in the past five months, according to Labor Department data.