The number of US citizens collecting unemployment benefits hit a 25-year high during the week ending October 25th, official figures show.

Jobless claims rose by 12,000 to a seasonally adjusted 3.84 million, according to the Labor Department. This is the highest figures since 1983.

The number of people filing new claims was higher than expected at 481,000 in the week beginning November 1st, the data shows.

Increasing unemployment is likely to put a strain on numerous American families, many of whom are already struggling to manage their debt.

Bob Brusca, an economist at FAO Economics, told CNN Money: "The labor market is not looking good at all."

US employers have been making job cuts for nine consecutive months now.

Meanwhile, a report from the American Bankruptcy Institute has revealed that consumer bankruptcies increased by 40 per cent last month as a result of high debt levels and other economic pressures.

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