The number of new applications for unemployment benefits fell 38,000 last week to 326,000, the Labor Department reported on Thursday.

In a positive sign for the U.S. economic recovery, Thursday’s jobless claims number was less than forecasters’ expectations of 348,000.

Thursday’s numbers come after a rough August jobs report that fell well short of forecasters’ expectations. The economy added just 235,000 new jobs last month, well below the 750,000 that were expected. The overall unemployment rate dropped slightly from 5.4% to 5.2%.

“After three straight weekly increases, new jobless claims have finally moved to the downside. The decline of 38,000 to 326,000 in seasonally adjusted new claims leaves them slightly above the pandemic era low one month ago,” said Mark Hamrick, senior economic analyst at Bankrate. “The expected path forward for the job market and the broader economy is considered to be fairly upbeat.”

SEPTEMBER JOBS REPORT EXPECTED TO SHOW BOOST FROM EXPIRATION OF ADDED UNEMPLOYMENT BENEFITS

Millions are still unemployed compared to before the COVID-19 pandemic when the country’s unemployment rate dipped as low as 3.5% — its lowest level in decades. The delta variant of COVID-19 has been posing obstacles for the economy and has slowed economic growth.

The Federal Reserve recently revised down its GDP prediction from 7% in 2021 to 5.9% and slashed its growth forecast from 3.8% to 3.3% for next year. In terms of unemployment, the central bank’s June forecast for 4.8% unemployment this year was revised down to 4.5%. It kept its employment projections for the next few years the same.

Expanded unemployment benefits were phased out for the entire country last month. Republicans had pointed out that many recipients of the benefits were making more collecting government funds than working.

This week researchers at Goldman Sachs said that the expanded program had a “significant” effect on labor shortages in the U.S. and that its cessation will result in some 1.3 million jobs being added by the end of the year.

CLICK HERE TO READ MORE FROM THE WASHINGTON EXAMINER

The September jobs report will be released on Friday and is highly anticipated given the expanded unemployment program’s expiration. Consensus estimates are that 473,000 jobs were added last month and that the unemployment rate will decline from 5.2% to 5.1%.

Original Location: Jobless claims fall to 326,000, breaking three-week streak of increases

Washington Examiner Videos