That's 5 percent of all 72.5 million children living in the United States.

In an annual report being released Wednesday, the Annie E. Casey Foundation said that's just one reason why children overall are doing worse economically than they were a few years ago. The number of children living in poverty, for example, rose to 18 percent in 2003 from 17 percent three years earlier.

The foundation tracks 10 categories designed to measure the well-being of children, such as teen birth rates and high school dropout rates, two areas that have improved since 2000.

To get more parents working, the foundation recommended that states incorporate into their job training programs counseling for depression, substance abuse, domestic violence and other problems that make it harder to find and keep a job.

``They've got to find ways to deal more holistically with the challenges these families present,'' said the foundation's president, Douglas Nelson.

Nelson said welfare reform has moved millions of people into jobs, but it has left behind certain groups of people who need more than a new job skill.

The economy has been on the mend since the data in the report was gathered, and the number of unemployed people has dropped by 1.7 million since June 2003, according to the Labor Department. Nelson acknowledged that the number of children in persistently unemployed households may have improved since then, but he still believes the problem has gotten worse rather than better.

Wade Horn, who oversees welfare reform for the Bush administration, said he agreed that good job-training programs not only address job skills, but also barriers to employment such as substance abuse.

He was wary of the foundation's contention that more children live in households with persistently unemployed parents, saying participants in the Temporary Assistance for Needy Families program consistently underreport employment.

Horn said a recent study comparing the District of Columbia's welfare rolls with a national directory of newly hired workers found that 26 percent of TANF recipients believed to be without jobs actually had been employed - and half of them earned enough to disqualify them from the program.

``The only reason I bring that up is that there does seem to be significant underreporting of employment - how much is unknown - but there is some underreporting, at least in the TANF world,'' Horn said.

The foundation said parents who need particular help are those with prison records. An estimated 600,000 people get out of prison each year - and about two-thirds of them are parents, he said.

``It appears that prisons today are providing education and job training to fewer prisoners today than they did 10 years ago,'' Nelson said. ``We're saying just the opposite has to happen. Everybody coming out of prison should have some preparation to help them get a job.''

In some areas, children continued to make improvements. For example, the teen birth rate for girls ages 15-19 dropped to 43 births per 1,000 teens in 2002. That's the lowest percentage in the 16 years the foundation has monitored the category.

Also, the high school dropout rate fell to 8 percent, down from 11 percent three years earlier.

The group also said the number of children in single-parent households remained steady at 30 percent in 2003, the same rate as 2000.

The U.S. Census Bureau on Tuesday concluded that the number of children in single-parent households had stabilized. The bureau report noted that the portion of children in two-parent households began dropping in the 1980s.

Isabel V. Sawhill, a Brookings Institution analyst, said there is little evidence to explain the stabilization, though some believe it's due in part to a new generation learning from the mistakes of the previous one. Also, the strong economy of the late 1990s made it easier to stay employed, which reduces divorce rates, she said.

The foundation tracked the 10 categories by state. For example, the high school dropout rate ranged from a low of 4 percent in New Jersey, North Dakota and Washington, to a high of 12 percent in Arizona and Louisiana. Overall, Mississippi had the lowest ranking in six of the 10 categories tracked. New Hampshire had the highest ranking in four of the 10 categories tracked.

``This last fraction of folks need more help than they're routinely getting,'' Nelson said.