Thursday's weekly jobless claims reportwas just the latest but perhaps most definitive sign yet that if the economy is to recover, it will do without participation from the labor market.

Instead, the continued trend of businesses doing more with less likely will hold as jittery employers remain reluctant to start bringing workers back on board.

"We've had increases (in jobless claims) the last couple of weeks, when most of us thought they would be decreasing. The number of people claiming benefits is now disturbingly high," says David Resler, senior economist at Nomura Securities in New York. "For those who doubted it will be a long, drawn-out period, they can't doubt it anymore."

New filings for unemployment claims breached the psychologically important 500,000level in the past week, an increase of 12,000 from the previous week's revised number of 488,000.

That came despite data that the private sector actually has been creating jobs. The monthly Labor Department report for July showed 71,000 private jobs were created even as total nonfarm payrolls fell 131,000.

The trend is confounding economists, who say the net job creation in the private sector ought to start having some effect on the weekly number.

The latter figure is significant in that it is the rawest measure of the jobs picture. While the monthly number entails a series of computations based on the government's birth-death model, determinations of who is actually looking for a job and who is discouraged, and a host of other arcane measuring tools, the weekly number is a simple census of how many people filed new claims for unemployment insurance.

"There's got to be an awful lot of job-churning going on if we can have positive private sector employment growth for seven months out of the year and this (weekly claims) thing is drifting up," says Kurt Karl, chief US economist at Swiss Re in New York. "Businesses have got to be laying off a lot of people and hiring a lot of people, and the net is slightly positive."

One of the most vexing problems for policy makers has been what to do about the long-term unemployed.

Claimants under the Emergency Unemployment Compensation provision—who have exhausted their state benefits—surged 260,105 to 4,753,456 for the week ended July 31 (the data lags the weekly claims by two weeks). While that represents a weekly increase of 0.5 percent, the total is 60.5 percent higher than the 2009 figure of 2,961,457.