This post was originally published on this site
The numbers: The number of people who applied for U.S. unemployment benefits in late September rose to a two-month high, but much of the increase took place in California. New claims have fallen in most other states in a sign the labor market is still quite healthy despite the delta variant.
New jobless claims paid traditionally by the states rose by 11,000 to 362,000 in the seven days ended Sept. 25, the government said Thursday.
Economists polled by The Wall Street Journal had estimated new claims would total a seasonally adjusted 330,000.
At least 6.5 million Americans, meanwhile, lost their unemployment benefits in early September when a federal-relief program set up during the pandemic expired.
Although it was already known that millions had been cut off, the government’s latest estimate of new unemployment claims was the first to include official numbers.
New jobless claims had been falling for months even before the looming cutoff of federal benefits, reflecting a surge in hiring and a reluctance by businesses to fire anyone in light of a major labor shortage.
Read: The Fed has bet on a future of low inflation. Here’s what could go wrong
Most of the people who lost benefits are likely to rejoin the labor force in the coming months and make it easier for companies to hire. A lack of labor is one of the biggest impediments to a faster economic recovery from the coronavirus.
Big picture: The economy is still growing at a rapid if somewhat slower pace compared to a few months ago. The rise of the delta variant briefly knocked it off stride, but growth has mostly held steady.
Read: Half of all small businesses can’t find enough workers to fill open jobs
The economy could expand even faster if more people returned to the labor force, but millions of Americans are still too hesitant to go back to work even with many companies offering higher pay and benefits.
The loss of extra jobless benefits could also weigh on consumer spending and the economy in the short run.
Market reaction: The Dow Jones Industrial Average
DJIA,
and S&P 500
SPX,
were set to open higher in Thursday trades.
