And US car giant Ford reported a $5.9bn loss in the fourth financial quarter and announced it was to cut 1,200 jobs, although it insisted that unlike many other US car firms it would not seek government loans.

The housing meltdown, sparked by the subprime mortgage crisis in which millions of Americans were given mortgage loans they were unable to repay, has led to massive financial losses worldwide.

US stocks fell sharply following the gloomy data, with the Dow Jones Industrial Average falling 226.44 points or 2.7 per cent to close at 8,149.01.

Obama plan

The latest figures on jobless claims were released a day after the US House of Representatives approved a new $819bn economic stimulus package backed by Barack Obama, the US president.

The bill now passes to the US senate, where the bill faces stiff opposition from Republicans.

The latest jobless claims figures do not include about 1.7 million people receiving benefits under an extended unemployment compensation programme approved by the US congress last year, which would push the total to almost 6.5 million people.

New claims for state unemployment insurance benefits in the US also increased to a seasonally adjusted 588,000 last week from a revised 585,000 the previous week, the labour department said.

Analysts say the record number of benefit claims shows that unemployed workers are finding it increasingly difficult to find new jobs.

The numbers of unemployment claims have also put pressure on many US states' processing systems, which led to electronic filing systems collapsing in three states earlier this month, the Associated Press news agency reported.

Obama's stimulus package would provide $500m to the states to upgrade states' unemployment insurance systems and would continue last year's extended jobless compensation programme - which provides up to 33 weeks of benefits - until the end of this year, AP said.

Pay act

On Thursday, Obama also signed a new law making it easier for women to sue their
employers for pay discrimination.

The law overrides a US Supreme Court ruling in 2007 that stated workers had only 180 days to file a pay discrimination lawsuit and extended the starting deadline to the date of an employee's last pay checque.

"We are upholding one of this nation's first principles that we are all created equal and each deserve a chance to pursue our own version of happiness," Obama said at the White House signing ceremony on Thursday.