WASHINGTON (Reuters) – The number of Americans filing new claims for unemployment benefits increased last week for the third straight week, which could raise concerns that the labor market was softening.

The Labor Department reported that initial claims for state unemployment benefits increased 11,000 to 362,000, seasonally adjusted for the week ending Sept. 25. Reuters polled economists and predicted 335,000 claims for the week ending Sept. 25.

According to economists, claims have increased, and they blame a number of factors such as wildfires in California, Hurricane Ida that struck the Gulf Coast in August and caused unprecedented flooding in New York, New Jersey, and New York in September.

A resurgence of COVID-19 infection, triggered by the Delta version of the coronavirus could also be causing a steady increase in claims.

While claims dropped to 6.149m in April 2020 from their record high, they are still well above the pre-pandemic level.

Claims are expected to fall in coming weeks as economic activity appears to be improving after it was restrained by the coronavirus virus wave. Although there are signs that the infections seem to be subsiding, deaths are still high.

Stephen Juneau (Bank of America Securities, New York) said that “Continued improvements on this front should support the demand for services.” We are beginning to see signs of a rise in travel demand. Card spending has increased.

Watch out for any signs that a shortfall of workers may ease after expiration of early August’s federally-funded benefits. Both Republicans and businesses blamed the government for keeping people unemployed. At the end July, there were 10.9 million unfilled jobs. On Sept. 6, more than 8 million individuals lost their pandemic benefit.

“So far, evidence from the states that ended benefits early over the summer suggests that even with the end of unemployment benefits nationally, there is unlikely to be a sudden and large return to the labor force,” said Veronica Clark, an economist at Citigroup (NYSE:) in New York.

The August economy saw 235,000 job creations, the most in seven months. The reason for this shortage of workers is a lack of childcare and fears about contracting the coronavirus.

On Thursday, the Commerce Department published a separate report that confirmed economic growth was accelerating in the second trimester, thanks to government pandemic aid money, which increased consumer spending.

The department’s third estimate of the GDP growth rate for April-June quarter showed that gross domestic product increased by 6.7% per annum. The rate of expansion was 6.6% in August, which had been revised to reflect this increase.

In the first quarter, growth was 6.3%. The third quarter’s slowdown in growth is likely due to the Delta variant and shortages of raw material. These factors have affected motor vehicle sales, constrained home construction, and limited purchases.

The third quarter growth estimates are lower than 5%.