US unemployment claims rise as delta variant weighs on economy

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The number of Americans seeking unemployment benefits rose to at least 332,000 last week from a pandemic, a sign that a worsening COVID infection could lead to a slight increase in layoffs.

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The Labor Department said Thursday that applications for jobless aid had risen from 312,000 a week earlier. Jobless claims, which typically track the pace of layoffs, have been falling steadily for two months, as many employers, struggling to fill jobs, hold on to their employees. Two weeks ago, jobless claims hit their lowest level since March 2020.

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Jobless claims rose by 4,000 in Louisiana, evidence that Hurricane Ida caused widespread job loss in that state. Ida will moderate economy growth in the current July-September quarter, although repair and reconstruction efforts are expected to recoup those losses in the coming months.

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Still, Ida nearly two weeks ago closed oil refineries in Louisiana and Mississippi and left more than 1 million homes and businesses without electricity. But Ida’s impact was limited: Applications for jobless aid in Mississippi fell short.

FILE – A sign that says “Now Hiring!” Viewed in the window of a PetSmart location along 5th Street Highway on August 26, 2021 in Muhlenberg, Pennsylvania. (Photo via Getty Images by Ben Hasty/Media NewsGroup/Reading Eagle)

The job market and broader economy have been slammed in recent weeks by the Delta version, which has discouraged many Americans from traveling, staying in hotels and eating out. Earlier this month, the government reported that employers added just 235,000 jobs in August, after adding nearly a million people in both June and July.

Recruitment decreased in August in industries that require face-to-face contact with the public, particularly restaurants, hotels and retailers. Still, some jobs were added in other sectors, and the unemployment rate actually fell from 5.4% to 5.2%.

The steady decline in weekly applications for unemployment benefits coincides with the scaling-back of aid for unemployed Americans. Last week, more than 8 million people lost all their unemployment benefits with the end of two federal programs, including gig workers and those unemployed for more than six months. Those emergency programs were created in March 2020, when the pandemic devastated the economy for the first time.

An additional 2.7 million people receiving regular state unemployment assistance lost the $300-a-week federal unemployment supplement last week.


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