Labour has called on the government to change economic course, arguing that its policies are not working.
Shadow work and pensions secretary Liam Byrne said Chancellor George Osborne's decision to "clobber" the economy was causing "unalloyed misery" for families.
"Once again we've heard of families losing their jobs because of this government's decision to cut too far and too fast and once again we see the consequences of this government's decision to stand easy while millions of people in our country are now standing idle," he said.
Mr Byrne was opening an opposition debate on unemployment on 14 December 2011 - the day the latest unemployment figures were published.
The figures showed the number of people out of work in the UK increased by 128,000 in the three months to October, to 2.64 million - the highest level since 1994.
Youth unemployment now stands at 1.027 million, the highest since records began in 1992, beating the previous record set only last month.
However, the rate of increase in the claimant count showed signs of slowing down.
Mr Byrne said that despite the "blizzard of initiatives" announced by the government, the Office for Budget Responsibility forecast rising unemployment.
He told the government to learn from the figures and bring forward a "real plan" to get people back to work and to create economic growth.
Employment Minister Chris Grayling admitted the figures were disappointing, and stressed the matter remained a priority for the government.
But he insisted the government's economic strategy would continue.
Conservative MP Robert Syms backed the government's economic policies, but stressed the need for better vocational education.
However, SNP spokeswoman Eilidh Whiteford accused the government of taking a "very ideological and doctrinaire" approach to cutting the public sector.
Liberal Democrat Jenny Willott said it was important for the House to debate unemployment but lamented that "we seem to be having the same opposition day debates over and over again".
"Every debate follows the same pattern," she told MPs. "Labour don't accept responsibility for the economic mess in which we find ourselves and they are not giving new ideas on how to tackle this. They are giving the same ideas in every single debate we have."
Labour's motion calling on the government to adopt its five-point plan for job creation and growth was rejected by 307 votes to 233, majority 74.