Stocks tumbled across the board Thursday as investors fear the latest jobs report suggests more layoffs in the future.

The number of first time jobless claims hit 500,000 last week. That's up 12,000 from the previous report, which makes it the third straight weekly increase.

"The rise in initial jobless claims over the past three weeks makes it difficult to maintain confidence in the recovery and suggests the labor market is backtracking more than we first expected," economist Ryan Sweet, with Moody's Analytics, said.

Jobless claims flattened out earlier this year, but claims have begun to grow again which could be evidence the economic recovery is slowing and the country could even slip back into recession.

Many of the jobs that were lost came from state and local governments trying to close large budget gaps.

Homebuilders and other construction firms have also seen a high number of layoffs.