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Jobless claims rise for a second straight week amid Delta spread and Hurricane Ida impact

Mismatch between job openings, unemployed
Mismatch between job openings, unemployed 08:22

The number of Americans applying for weekly unemployment aid rose for a second straight week to 351,000, a sign the job market is facing headwinds as the U.S. grapples with a surge in COVID-19 cases.

report Thursday from the Department of Labor showed that jobless claims rose by 16,000 from the previous week. As the job market has strengthened, unemployment aid applications, which generally track layoffs, have tumbled since topping 900,000 early this year, reflecting the economy's reopening after the pandemic recession.

Still, jobless claims remain elevated. Before the pandemic tore through the economy in March 2020, some 220,000 people applied for aid each week. In other words, weekly claims remain about 60% higher than before the pandemic. 

America's employers have rapidly increased their hiring since slashing 22 million jobs in March and April 2020, as the pandemic — and the shutdowns meant to contain it — brought economic activity to a near-standstill. Since then, the economy has recovered about 17 million jobs, as the rollout of vaccines encouraged businesses to reopen and expand hours and Americans to go back out to shop, travel and dine out.

"Hoped for progress on new claims for jobless benefits was not to be in the latest snapshot, posting a second straight weekly increase," said Mark Hamrick, senior economic analyst at Bankrate, in an email. "Part of the explanation behind the increase is seen with significant jumps coming from California and Virginia, providing a total of 37,000 new claims."

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Some economists say other factors beside the Delta variant are affecting the job market. Economist Ian Sheperdson of Pantheon Macroeconomcs thinks the rise in jobless claims likely reflects the impact of Hurricane Ida, along with seasonal factors.

 "We doubt the Delta Covid wave is a significant part of the story because cases have been rising for a couple months, but claims have declined," he said in a report. "Instead, hiring appears to have taken most of the strain."

Hiring, which has averaged more than 585,000 jobs a month this year, slowed to just 235,000 in August as the Delta variant disrupted the recovery. Overall, 2.8 million Americans were receiving unemployment benefits during the week of September 11, up by 131,000 from the week before.

Earlier this month, more than 8 million people lost all their unemployment benefits with the expiration of two federal programs that covered gig workers and people who have been jobless for more than six months. Those emergency programs had been created in March of last year to help ease the economic hardship caused by the pandemic.

An additional 2.7 million people who were receiving regular state unemployment aid lost a $300-a-week federal unemployment supplement last week.

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