The increase in the number of citizens claiming jobless benefits could lead to tax increases for employers in some states, it has been claimed.

Richard Hobbie, executive director of the National Association of State Workforce Agencies, told USA Today that rising unemployment is putting a strain on benefit funds.

Indeed, figures out this week revealed that new claims for unemployment benefits recently reached a 16-year high.

Mr Hobbie said that in order to keep benefit funds solvent, some states may need to impose higher taxes on employers and reduce benefits.

Meanwhile, Congress has announced plans to extend jobless benefits by seven weeks - or longer in states with high levels of unemployment.

According to USA Today, around 1.1 million people would exhaust their unemployment insurance by the end of the year if the plans were not implemented.

The US unemployment rate currently stands at 6.5 per cent following months of job losses, which have hit many of those already facing high levels of debt.

-----------------------------------------------------------------------