The number of new applications for unemployment benefits rose 20,000 last week to 332,000, the Labor Department reported on Thursday, partly driven by fallout from Hurricane Ida.
The new numbers were just higher than the 330,000 expected by forecasters.
The numbers reflect the first week with nobody receiving $300 supplemental payments to their state unemployment insurance, one of the expanded federal programs that ended on Labor Day. The GOP and some economists have blamed labor shortages on the revved-up benefits, although other economists say their effect has been minor.
“On the face of it, it is disappointing but not entirely surprising to see a slight increase in new jobless claims given the toll taken by the delta variant,” said Mark Hamrick, the senior economic analyst at Bankrate. “Countering that somewhat is the decline in continuing claims to a fresh pandemic-era low.”
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The largest increase in jobless claims came from Louisiana, which recently suffered damage from Hurricane Ida, which pummeled the state with wind and flooding. Overall claims were pushed higher at least in part because of the natural disaster.
The news comes after the August jobs report, released last week, fell well short of what economists were hoping for. 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%.
Millions are still unemployed compared to before the pandemic when the country’s unemployment rate was as low as 3.5%, the lowest level in decades. The delta variant of COVID-19 has also been creating problems for the economy, which has been grappling with surging cases of the virus.
Average daily cases dropped to about 11,000 per day in late June and early July before skyrocketing as the variant, which is much more contagious, took hold. Cases are now averaging about 150,000 per day, and deaths are up 40% from two weeks ago.
Inflation has also been causing some anxiety about the economy. Consumer prices increased 5.3% in the year ending in July, according to a report released this week by the Department of Labor.
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Last week, Goldman Sachs revised down its gross domestic product forecast for 2021 from 6.2% to 5.7% and Wells Fargo also revised down its third-quarter GDP estimate by 2.25 percentage points to 4.6%. It also cut its fourth-quarter projections slightly to 5.7%.
