More than 13 million Americans were jobless in March as the nation's unemployment rate rose to 8.5 percent, its highest level since 1983.

A Labor Department report issued Friday said employers cut 663,000 jobs last month, continuing a series of losses that have erased 5.1 million payroll positions in what is now the longest recession since World War II.

Friday's report bodes ill for California, where the unemployment rate hit 10.5 percent in February. The March jump at the national level means California's rate will rise when state officials issue their update later this month.

In addition to counting how many Americans were out of work in March, the Labor Department also tallied the number who were forced to work part time or were too discouraged to look. This second figure, sometimes called the underemployment rate, was 15.6 percent, the highest level since this count began in 1994.

The dismal jobs report follows what had been hopeful signs that the economy was starting to mend. Orders at U.S. factories rose in February, as did consumer spending, the economy's driving force.

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Economists said the jump in joblessness did not necessarily negate those positives.

"The unemployment rate is a lagging indicator and will rise even if we are nearing the bottom," said Joel Naroff, a national economic forecaster based in Pennsylvania.

Leading Wall Street indexes closed slightly higher Friday as investors continued a four-week rally sparked by optimism that the economy is slowly mending. Stocks tend to bounce back before recessions end.

How high the unemployment rate will go is a matter of conjecture. During the Great Depression, the rate was as high as 25 percent. The peak unemployment rate since World War II was 10.8 percent in November and December of 1982, when the country was in the throes of another deep recession, said Mark Zandi, chief forecaster at Moody's Economy.com.

Zandi thinks the U.S. unemployment rate will peak at about 10 percent by the spring of 2010, though he can't exclude the possibility that it will go higher.

Wherever and whenever the rate tops out, Zandi said, unemployment will come down very slowly. "We won't get back to full employment, meaning a 5 percent rate, until 2013 or maybe 2014," he said.

There was nothing to cheer in Friday's report. Almost every sector of the economy lost jobs in March. The rare exceptions included education and health services, utilities and the federal government.

The average work week dropped to 33.2 hours, the lowest level on record since 1964. That suggests there is still slack in the labor market.

The average duration of unemployment was about 20 weeks in March. A year ago it was 17 weeks. Nearly 1 in 4 unemployed persons, or 3.2 million Americans, has been out of work for more than six months.

Clayton resident Jay Bedecarre, who lost his job in February 2007, said he probably would have found work that year had it not been for his wife's sudden death not too long after his layoff.

By the time he recovered and resumed his job hunt, the recession had begun. Now he searches in vain for a position in marketing or communications.

"I've been doing freelance work and I'm continuing to look," Bedecarre said. "I'm by nature a pretty optimistic guy, but this has tested me to the umpteenth degree."