The number of new applications for unemployment benefits rose 16,000 last week to 351,000, the Labor Department reported on Thursday.
The new numbers were more than expected, bolstering the arguments of those who say the country’s economic recovery still has a way to go. Thursday’s jobless claims number was more than forecasters’ expectations of 320,000. The previous week saw 336,500 people applying for unemployment insurance for the first time.
“Progress on new claims for jobless benefits was not to be in the latest snapshot, posting a second straight weekly increase,” said Bankrate senior economic analyst Mark Hamrick. “The economy still has some heavy lifting to do under the presumption that further progress will be made in the coming months while putting the pandemic behind.”
Thursday’s numbers come after a rough August jobs report that fell well short of forecasters’ expectations. The economy added just 235,000 new jobs last month, well below the 750,000 that were expected. The overall unemployment rate dropped slightly from 5.4% to 5.2%.
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Millions are still unemployed compared to pre-pandemic when the country’s unemployment rate dipped as low as 3.5% — its lowest level in decades. The delta variant of COVID-19 has been posing obstacles for the economy, which has been grappling with surging cases of the virus that have led to certain industries such as leisure and hospitality to once again feel the weight of the pandemic.
The report comes a day after the Federal Reserve revised down its expectations of employment and gross domestic product growth for this year.
It changed its GDP prediction from 7% in 2021 to its 5.9% prediction from June and slashed its growth forecast from 3.8% to 3.3% for next year. In terms of unemployment, the central bank’s June forecast for 4.8% unemployment this year was revised down to 4.5%. It kept its employment projections for the next few years the same.
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Goldman Sachs also recently revised down its GDP forecast for 2021 from 6.2% to 5.7%, and Wells Fargo additionally cut some of its GDP predictions.
