The number of people applying for unemployment benefits last week hit the half million mark, a major surprise and a major disappointment to those who thought the economy was turning around.
"These numbers are important because they indicate the rate of growth in the economy is weakening and that the rate for growth is now insufficient to stop unemployment from rising," said Mark Zandi, chief economist for Moody's Analytics.
The latest jobless claims numbers, released by the Labor Department today, mark the third straight week that they've risen. In a healthy economy, jobless claims usually drop below 400,000. Right now, they've risen to 500,000.
In Washington, the grim numbers prompted a statement from President Obama.
"This morning's news that unemployment claims rose again compels us to act," he said this morning, touting a plan to promote hiring by small business.
Last spring, the Obama administration was assuring the country that the recovery in the job market was well underway.
"This is the fifth month in a row we've seen job gains," Pres. Obama said in June of last year.
But unemployment continues to hover stubbornly at 9.5 percent. Last month, the economy shed 131,000 jobs in a country where 14.6 million people are looking for work.
Factoring in those who have settled for part-time work or who simply have given up, the number of unemployed or underemployed Americans tops 25 million.
Today's report could be a precursor of economists' worst fears, that the country could be headed into a double-dip recession.
"The economy ebbs and it flows," Zandi said. "This recent slowdown is making me nervous primarily because the economy coming into this is already very weak."
Unemployed workers are filing for benefits at a pace not seen since last fall, when the economy was shedding hundreds of thousands of jobs a month.
Many economists had hoped job recovery would be fueled by small businesses, but small businesses are actually losing workers, not gaining them.
This week the Labor Department reported that small businesses are accounting for more than 60 percent of all recent job losses. In a strong economy, small businesses typically hire the most workers.
Pat Orzano owns a 7-Eleven in Massapequa, New York. She had expected this summer to hire more help, but he couldn't afford it.
"My sales are down," Orzano said. "The employees I do have would like to work more hours, but I'm just eking by now."
The president is pushing a bill, stalled in the Senate, that's designed to help business people like Orzano by offering tax breaks and easy loans, but few believe there are any easy answers at this point.
"You just have to look forward. If you don't as a business owner, it will beat you," Orzano said.
The Associated Press Contributed To This Report.