New claims for unemployment benefits dropped slightly last week, while the number of people continuing to receive benefits reached its highest level in more than 25 years, the government said Thursday.

The Labor Department reported that initial claims for jobless benefits dropped 4,000 to a seasonally adjusted 481,000 for the week ending Nov. 1. That's just above analysts' estimates of 480,000, according to Thomson Reuters.

But the number of people continuing to receive unemployment insurance jumped by 122,000 to 3.84 million, the highest since 1983, when the nation was coming out of a deep recession. The figure for continuing claims lags the initial claims report and is for the week ending Oct. 25.

The increase indicates that unemployed workers are taking longer to find new jobs and is more evidence of recessionary conditions in the job market.

The number also may affect the political debate, as Democrats in Congress are pushing to include an extension of unemployment benefits in a new stimulus package, which could be taken up this month. Benefits typically last 26 weeks.

Congress approved a 13-week extension of benefits in June, and the department said about 773,000 additional people claimed benefits through that program for the week ending Oct. 18, the most recent data available. That extension is scheduled to end in June 2009.

Initial claims have been elevated in recent weeks due to the struggling economy, which has been hit by a global crisis in financial markets, and cutbacks in business and consumer spending.

Last month, new claims also were higher due to the impact of Hurricanes Ike and Gustav, but the department said that Thursday's figures don't include any hurricane impact.

The four-week average of claims, which smooths out fluctuations, was unchanged at 477,000.

Jobless claims above 400,000 are considered to be a sign of recession, and claims have stood above that level for 16 weeks. A year ago, initial claims were 324,000.

Several companies announced layoffs this week, including Hartford Financial Services Group Inc., Circuit City Stores Inc., drugmaker GlaxoSmithKline PLC, chip maker Advanced Micro Devices Inc., auto parts maker Dana Holding Corp., and cable operators Comcast Corp. and Cox Communications Inc.