WASHINGTON (Reuters) – The number of Americans filing new claims for jobless benefits unexpectedly rose last week, though the labor market continues to steadily recover.

The Labor Department reported that initial claims for state unemployment benefits rose 16,000 to 351,000 in the week ending Sept. 18.

Ida made landfall late in August. The storm decimated U.S. off-shore energy production, and cut power to Louisiana. The most destructive hurricane to ever hit the Gulf Coast was Ida. It also devastated Mississippi, causing record-breaking flooding in New York State and New Jersey.

Reuters polled economists and predicted that 320,000 people would apply for jobs in the week to come. Although claims have fallen to a new record of 6.149million in April 2020, they still exceed the range between 200,000 and 250,000 that is consistent with an improving labor market.

Wednesday’s positive outlook by the Federal Reserve was a sign that the Federal Reserve is preparing to cut its monthly bond purchases and signals interest rate hikes may be coming sooner than expected.

The claims data for last week covered the time that the government interviewed employers to determine if they were interested in the September nonfarm payrolls section of the employment report.

Payrolls saw their lowest gain in seven month in August. This was due to a slowdown in job growth in high-contact leisure and hospitality sectors, where coronavirus infections caused by the Delta strain of the virus soared.

Pandemic-related issues are restricting employment. Jerome Powell, Fed Chair said that he expected “more rapid increases in employment” as factors such as lack of child care or fears about contracting the disease, decrease.

At the end July, there were 10.9 million open jobs. According to the Fed, this year’s unemployment rate would be 4.8%. It was higher than the 3.5% projected by the U.S. central banking back in June. In August, the jobless rate was 5.2%.