Unemployment Claims Rise For Second Week: What You Need To Know

Initial unemployment claims rose by 16,000 last week to 351,000, according to the Department of Labor.

What Happened: Overall, the unemployment rate was 2.1% for the week ending Sept. 11. Unemployment claims are rising slightly above their pandemic low, which was reached two weeks ago. 

Why It's Important: Mark Hamrick, senior economic analyst at Bankrate, said the pandemic is still with us, causing trouble in the broader economy.

"The economy still has some heavy lifting to do under the presumption that further progress will be made in the coming months while putting the pandemic behind,” he wrote in an email. 

The highest unemployment rates are in Puerto Rico, Washington, D.C., California and New Jersey, while the largest increases occurred in Louisiana, Washington, D.C. and Arizona. 

The labor market is in an odd limbo period considering both high rates of job openings and unemployment, Hamrick said. 

"We’re witnessing a virtual Twilight Zone where the job market is both described as having slack and is tight at the same time, given high levels of unemployed and a record number of job openings,” he said.

“Millions of Americans will be reliant on that improvement to get back to work and to elevate their own personal finances."

Bloomberg speculated that increased unemployment in Louisiana — tied to Hurricane Ida, which recently tore through the state — was a large part of the higher unemployment numbers. 

Market Reaction: Despite the slight setback in the labor market, the stock market has been bullish Thursday The S&P 500, Dow 30 and Nasdaq were all up when the market opened Thursday morning. 

What's Next: On Wednesday, Fed Chair Jerome Powell announced the Federal Reserve will begin tapering its monthly asset purchases in the near future.

The central bank is projecting a 2021 unemployment rate of 4.8%. Powell reiterated his belief that inflation, which is above the targeted rate of 2%, is transitory.  

Photo: The blowup via Unsplash.