The number of Americans filing new claims for jobless benefits unexpectedly rose last week amid a surge in California, but the labour market continues to steadily recover.
Initial claims for state unemployment benefits increased 16,000 to a seasonally adjusted 351,000 for the week ended September 18, the Labor Department said today.
Economists polled by Reuters had forecast 320,000 applications for the latest week.
There was a 24,221 jump in unadjusted claims in California. That offset a sharp decrease in filings in Louisiana, which was devastated by Hurricane Ida in late August.
The four-week moving average of claims, considered a better measure of labour market trends as it irons out week-to-week volatility, fell 750 to 335,750 last week.
Claims have dropped from a record 6.149 million in early April 2020, but still remain above the 200,000-250,000 range viewed as consistent with healthy labour market conditions.
The Federal Reserve last night struck upbeat note on the economy, paving the way to reduce its monthly bond purchases "soon" and signaling interest rate increases may follow more quickly than expected.
Last week's claims data covered the period during which the government surveyed employers for the non-farm payrolls portion of September's employment report.
Job growth slowed in August, with payrolls posting their smallest gain in seven months amid a stalling in hiring in the high contact leisure and hospitality sector as infections driven by the Delta variant of the coronavirus surged.
Pandemic-related factors are causing worker shortages, which are constraining hiring.
US Fed Chair Jerome Powell told reporters he anticipated "more rapid gains in employment" as these factors, which include lack of affordable child care and fears contracting the virus, diminish.
There were a record 10.9 million job openings at the end of July. The Fed projected the unemployment rate at 4.8% this year. That was up from the 4.5% rate the US Fed projected back in June.
The jobless rate was at 5.2% in August.