Initial jobless claims in the United States dropped to 310,000 last week amid a Delta variant-fueled COVID-19 surge, hitting a new low for the pandemic era, the Labor Department reported on Thursday.

In the week ending Sept. 4, the number of Americans filing for unemployment benefits decreased by 35,000 from the previous week's upwardly revised level of 345,000, according to a report released by the department's Bureau of Labor Statistics.

The latest figure marked the lowest level for initial claims since March 14, 2020, when it was 256,000.

In recent months, initial jobless claims have hit fresh low levels for the pandemic era by multiple times, but the declining trend was repeatedly reversed, indicating a bumpy economic recovery.

Despite hitting new pandemic low, jobless claims remain nearly 100,000 above pre-pandemic level, and the labor market recovery is far from complete and largely unequal.

As the Delta variant wallops the labor market and dents consumer confidence, U.S. economic growth "downshifted slightly" to a moderate pace in early July through August, according to a Federal Reserve survey released on Wednesday.

Wells Fargo Securities said in a report Thursday that "COVID concerns have weakened both the demand and supply prospects for labor, leading us to pare back our expectations for hiring over the remainder of the year."

The team, however, expects some "catch-up" early next year and raises its expectations for hiring in the first half of 2022.

The jobless claims report also showed that the number of people continuing to collect regular state unemployment benefits in the week ending Aug. 28 decreased by 22,000 to 2.78 million. That number peaked in April and May last year, when it was over 20 million.

Meanwhile, the total number of people claiming benefits in all programs -- state and federal combined -- for the week ending Aug. 21 decreased by 255,757 to 11.9 million.

That number is expected to decrease significantly in the coming weeks as federal unemployment benefits for over 10 million people expired on Monday.

Some 7.5 million workers or more will lose all their benefits, including gig workers and the self-employed, and nearly 3 million will lose a 300-U.S.-dollar weekly federal boost to state unemployment payments, according to a recent report from The Century Foundation, a progressive, nonpartisan think tank.

Noting that Delta is a "game changer" wreaking havoc on both the supply and demand for workers, Diane Swonk, chief economist at Grant Thornton, a major accounting firm, recently said the expiration of extended federal jobless programs adds insult to injury, as "millions will lose support as their prospect of getting a job deteriorates this fall."

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