The number of Americans filing new claims for jobless benefits fell last week, but layoffs increased from a 24-year low in September in part as hospitals fired unvaccinated staff and lack of workers forced closures of facilities.

Initial claims for state unemployment benefits decreased 38,000 to a seasonally adjusted 326,000 for the week ended Oct. 2, the Labor Department said on Thursday. Economists polled by Reuters had forecast 348,000 applications for the latest week.

Claims had increased for three straight weeks as California

moved people to another program following the expiration of federal government-funded aid on Sept. 6 to maximize their access to unemployment benefits. The transfer, which allowed recipients to collect one additional week of benefits, boosted applications, even though it reflected an existing claimant moving from one program to another.

Away from California, there were increases in claims related to the idling of assembly plants in some states by some automakers as they try to manage their supply of semiconductors amid a global shortage. A resurgence in COVID-19 infections, driven by the Delta variant, also disrupted activity in the high-contact services sector.

That suggested some moderation in labor market conditions. A separate report on Thursday from global outplacement firm Challenger, Gray & Christmas showed job cuts announced by U.S.-based employers increased 14% to 17,895 in September. Still, layoffs were down 85% compared to September 2020.

In the third quarter, employers announced 52,560 job cuts, the fewest since the second quarter of 1997 and down 23% from the July-September period.

Layoffs last month were led by companies in the healthcare/products sector, with 2,673 announced cuts. Since the Pfizer vaccine received full-FDA approval, many health care facilities have implemented vaccine mandates.

“Healthcare is facing an enormous talent shortage,” said