There was an unexpectedly large drop in new unemployment benefits last week, as jobless Americans put off claiming until after the Christmas holiday.

Initial claims for benefits fell by 94,000 to 492,000 in the week to December 27, the biggest drop since August 1992.

But continuing claims for benefits, which counts workers who have been collecting the dole for more than a week in the seven days to December 20, surged by 140,000 to 4.5 million as record job losses continued to take their toll.

About 1.9 million Americans have lost their jobs this year. The rise in continuing unemployment claims was the biggest in 26 years.

The figures from the US Labour Department were released today, a day early because of the New Year holiday tomorrow. Analysts warned that jobless numbers would be volatile for the next few weeks because the Labour Department struggles to adjust its calculations to take into account holidays.

America has been in a recession since December 2007.

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