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U.S. jobless claims fall to new pandemic low of 340,000 despite delta surge

The numbers: The number of people applying for U.S. unemployment benefits at the end of August fell to a new pandemic low, suggesting the delta strain of the coronavirus hasn’t done much damage to the economy.

Initial jobless claims in the states dropped by 14,000 to 340,000 in the week ended Aug. 28, the government said Thursday.

Economists polled by The Wall Street Journal had estimated new claims would total 345,000.

Before the pandemic, initial jobless claims averaged about 220,000 a week.

Big picture: Fewer and fewer people are seeking benefits with the economy continuing to recover. Delta is unlikely to undo the progress unless the caseload explodes. The most recent evidence suggests it might be starting to crest.

Read: Consumer confidence sinks to 6-month low on delta anxiety and inflation

Also: Inflation in the U.S. is running at the highest level in 30 years

By most measures the labor market is quite strong. Job openings recently topped a 10 million for the first time and many companies are offering higher pay to attract workers, to cite a few examples.

The biggest stumbling block is a lack of labor. Millions of people who had a job before the pandemic still haven’t returned to work.

The labor shortage is hampering the U.S. economic recovery and is likely to do so through the end of the year.

Market reaction: The Dow Jones Industrial Average
DJIA,
-0.14%

and S&P 500
SPX,
+0.03%

were set to open higher in Thursday trades.

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