New weekly jobless claims hovered near their lowest level since March 2020, underscoring the sustained improvement in the labor market despite ongoing concerns over the Delta variant and worker shortages. 

The Labor Department released its weekly jobless claims report on Thursday at 8:30 a.m. ET. Here were the main metrics from the print, compared to consensus estimates compiled by Bloomberg:

  • Initial unemployment claims, week ended August 21: 353,000 vs. 350,000 expected and a revised 349,000 during the prior week 

  • Continuing claims, week ended August 14: 2.862 million vs. 2.772 million expected and 2.820 million during the prior week

At 353,000, the level of new jobless claims was up slightly from the previous week, marking the first increase in initial claims in five weeks. Still, weekly claims have more than halved compared to their weekly pace in August 2020, and have trended lower since the start of 2021. And the four-week moving average for new jobless claims came down by another 11,500 to reach 366,500, marking the lowest level since March 2020. 

The U.S. economy, however, has yet to return to the weekly filing levels of the period before the pandemic. New claims were coming in at a weekly rate of just over 200,000 throughout 2019. 

And the total number of individuals claiming benefits across all state and federal programs remains elevated relative to pre-virus sums. As of the week ended August 7, about 12 million Americans were claiming benefits of all forms, marking an increase of 182,000 versus the previous period. 

This total, while bumpy, has largely come down as more vaccinations took place and more than two dozen states phased out federal enhanced unemployment benefits, with the hope of incentivizing workers to rejoin the labor market. At the national level, all states are set to phase out pandemic-era federal augmented unemployment benefits as of Sept. 6.

Many economists are looking for the broader expiration of these unemployment benefits and the start of the school year to provide a further boost to the labor market in the coming weeks and months. 

"Fundamentally, if we look at the production side of the economy, labor's going to come more back to the market after Labor Day when kids are back in school, where more folks are vaccinated, when those unemployment benefits run out," JoAnne Feeney, partner and portfolio manager at Advisors Capital Management, told Yahoo Finance. "We have a lot of good fundamentals in place for continued economic growth."

Others highlighted that the increase in COVID-19 cases does pose a risk to the pace of the economic recovery, but that the labor market should ultimately still see a strong pick-up even against this backdrop. 

"Not to sound too sanguine — we do see the rise in the Delta cases, that is a downside risk to the economy — but we do think that each of these surges has had less of an impact on the economy, partly because the appetite for adding restrictions from the administration seems to be lower," Priya Misra, TD Securities managing director, told Yahoo Finance. "We do see a slowing in the economic outlook, or GDP, but remaining very robust, and the labor market really accelerating. GDP has outpaced the labor market, and now it's time for the labor market to catch up." 

Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck

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