Some 881,000 people claimed jobless benefits last week as labor market continues to feel pain of pandemic

The Labor Department changed its methodology in calculating the overall jobless claims number to make the data more reliable by taking into account seasonal swings. Under that metric, 881,000 applications were processed last week.

In the unadjusted metric, state unemployment claims were around 833,000 - a slight rise from the previous week.

Another 759,000 people applied for Pandemic Unemployment Assistance, the program for self-employed and gig workers, an increase of about 150,000, from the previous week.

All told, 29 million people were receiving some form of unemployment insurance as of mid-August - an increase of two million from the week previously - as more people remain jobless or are joining the ranks of the unemployed, than those going back to work full time.

"The numbers just clearly show a continued level of high distress in the country," said Stephanie Aaronson, a labor economist at the Brookings Institution. "These are just terrible numbers."

Aaronson said the jobless claims indicate that the number of layoffs remains high - a sign that businesses are still struggling mightily, even as social distancing measures have eased in many parts of the country.

"Now a lot of businesses have started to operate again. But still we see this huge amount, large numbers of layoffs," she said. "Is what's going on now, still sort of largely due to social distancing, weak demand for consumers, temporary stuff? Or are we starting to see more structural changes taking place as business hunker down or start to envision permanent changes to their model. My guess is that the continued high level of claims represents both of those things."

Though the numbers have trended downward since their peak in March, they still dwarf historic highs, like the pre-pandemic record of 695,000 of new unemployment claims from 1982, as well as typical averages.

For the same week in 2019, about 180,000 people filed new claims, and about 1.6 million people in total were claiming benefits, according to federal statistics.

The White House hailed the claim numbers on Thursday, saying they boded well for Friday's jobs report.

"We were definitely very encouraged by the unemployment insurance claims numbers coming out today," said Tyler Goodspeed, acting chair of the White House Council of Economic Advisers.

The country's August unemployment rate, which was at 10.2% in July, will be released on Friday, as economists continue to warn about the threat to the economy from the coronavirus and the expiration of government aid programs.