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WASHINGTON Unemployment zoomed to 8.5 percent last month, the highest in a quarter-century, as employers axed 663,000 more workers and pushed the nation’s jobless ranks past 13 million. The hard times were only expected to get harder a painful 10 percent jobless rate before long.

The current rate would be even higher 15.6 percent if it included laid-off workers who have given up looking for new jobs or have had to settle for part-time work because they can’t do any better. That’s the highest on record for that number in records that go back to 1994.

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The Dow Jones industrial average clawed higher to end above 8,000 for the first time in nearly two months, and logged an impressive fourth consecutive week of gains.

The last time the Dow rose four weeks in a row was September to October 2007, when the index reached its record above 14,000.

Even if the economy continues to show signs of improvement, businesses will cut jobs and trim fat to stay lean and mean, said Sung Won Sohn, economist at the Martin Smith School of Business at California State University-Channel Islands.

So far, the public has shown great hopes for the economic policies of President Barack Obama. But those could fade quickly with more months of layoffs. In Europe for an economic summit, Obama called Friday’s unemployment report a stark reminder of a need for action at home and abroad.

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The recession may well end later this year Federal Reserve Chairman Ben Bernanke and many private analysts see that possibility but rehiring historically doesn’t get going until after an economic recovery is picking up steam. The jobless rate is expected to reach 10 percent by year’s end.

Wall Street’s newfound confidence kept swelling this week on better-than-expected economic data, a relaxation in bank accounting rules, and reassurances from the world’s finance leaders that they will keep propping up the global economy. The Labor Department’s March unemployment report Friday was the week’s last big hurdle.

The job numbers were certainly grim, but not terrible enough to derail the emerging sense of optimism over the past four months that the economy may be beginning to right itself. The Dow finished the week up 3.1 percent.

Small comfort to millions of laid-off workers. The Labor Department report underscored the recession’s toll: a spike in the jobless rate from February’s 8.1 percent and a net loss of 5.1 million jobs since December 2007, almost two-thirds of them in just the past five months. Economists say an additional 2.4 million jobs will disappear through the first quarter of next year.

As the downturn eats into companies’ sales and profits, they are laying off workers and resorting to other cost-saving survival measures that also hit employees, the report showed. Those include holding down hours and freezing or cutting pay.

It’s an ugly report, and April is going to be equally as bad, said Mark Zandi, chief economist at Moody’s Economy.com. I couldn’t see any rays of sunshine. Nothing.

The average workweek in March dropped to 33.2 hours, a record low. And nearly a quarter of the unemployed have been out of work for six months or more, the highest proportion since the steep 1981-82 recession.

Many who have been lucky enough to keep their jobs are seeing their paychecks shrink.

Average weekly earnings declined to $614.20 in March from $615.05 in February. If earnings keep falling, that would give consumers another reason to pull back spending, which would further weaken the economy.

January’s job losses were revised much higher, to 741,000 from 655,000, making them the worst in a single month since 1949.

In March, the number of unemployed people climbed to 13.2 million. The number of people forced to work part time for economic reasons rose by 423,000 to 9 million. Those are people who would like to work full time but whose hours were cut back or who were unable to find full-time work.

While many investors are looking ahead to an eventual recovery, others say Wall Street might be just as shortsighted now as it was when it was panicking. Potential pitfalls lie ahead not just for the job market, but also in corporate earnings reports and outlooks that start pouring in next week.

We’ve run way too high here, way too fast, said Joe Saluzzi, co-head of equity trading at Themis Trading.

The Dow on Friday climbed 39.51, or 0.5 percent, to 8,017.59 the index’s highest close since Feb. 9, when the index ended at 8,270.87. On March 9, the index sank to a nearly 12-year low of 6,547.05, but it’s now 22.5 percent above that trough.

The Dow’s rally has been its biggest four-week advance since 1933.

The Standard & Poor’s 500 index rose 8.12, or 1 percent, to 842.50 Friday. The Nasdaq composite index rose 19.24, or 1.2 percent, at 1,621.87, helped by BlackBerry maker Research In Motion, whose shares surged on better-than-expected profits.

About two stocks rose for every one that fell on the New York Stock Exchange, where consolidated volume came to 5.7 billion shares.