The number of U.S. workers filing new claims for unemployment benefits soared last week, suggesting no stabilization is in sight for labor markets.

Initial claims for jobless benefits rose 34,000 to 406,000 after seasonal adjustments in the week ended July 19, the Labor Department said. It matched the level of late March, which was the highest since September 2005, after Hurricane Katrina.

Meanwhile, total claims lasting more than one week fell slightly but remained at about the three-million mark for a 13th straight week, an indication that it is taking the unemployed much longer to find new work than it did a few months ago.

Goldman Sachs economists noted the level of initial claims -- above 400,000 -- was close to the level during most of the 2001 recession. They added "initial jobless claims can be particularly volatile around this time of year, as the precise timing of auto industry shutdowns can vary year-to-year, making seasonal adjustment difficult."

Separately, existing-home sales in the U.S. resumed falling in June and the median price also dropped as inventories crept higher. Sales fell to a 4.86 million annual rate, a 2.6% decrease from May's pace, the National Association of Realtors said.

REAL TIME ECONOMICS • Read the latest news and analysis on the economy at WSJ.com's Real Time Economics blog.• Housing Bill Close to Becoming Law

The median home price was $215,100 in June, down 6.1% from $229,000 in June 2007. The median price in May this year was $207,900.

A Labor Department analyst explained that government statisticians "got the layoffs we were expecting, but not quite in the weeks we were expecting." The four-week average -- which smoothes out weekly volatility -- rose by 4,500 to 382,500, a three-week high.

Nonfarm payrolls have fallen for six straight months, and recent jobless claims data point to another decline when July data are released next week. Economists worry that once the temporary boost from tax rebates winds down, consumers will be left with major drags from a weak jobs market, declines in home values and high food and energy prices. That could in turn weaken spending, which already appeared to have occurred in June.

The Labor Department report included the total number of workers drawing unemployment benefits for more than one week in the week ending July 12, the latest period for which those figures are available. The number -- known as continuing claims -- fell by 9,000 to 3.11 million.

Write to Brian Blackstone at brian.blackstone@dowjones.com and Jeff Bater at jeff.bater@dowjones.com

Insurance Cover for Real Estate Deals to Become a Reality Soon

Ansal’s Husing Pot Sheme under MRTPC Sanner

Home Prices Continue to Decline

Home Gauge Climbs Amid Bargains