The number of people in the United States filing claims for unemployment benefits rose sharply last week, signalling that the fast-spreading Omicron variant of COVID-19 is negatively impacting the jobs market recovery.
Some 286,000 initial jobless claims were filed last week, the US Bureau of Labor Statistics said on Thursday. That was an increase of 55,000 from the previous week’s revised reading and marked the highest level of claims since mid-October.
Initial jobless claims are a proxy for layoffs, and though the weekly metric tends to be volatile, analysts do see the surge in Omicron infections at play in the latest figures.
“The rise in claims reflects both an increase in layoffs due to the surge in COVID cases as well as an added boost from large seasonal adjustment factors,” said Nancy Vanden Houten, lead US economist for Oxford Economics. “Going forward seasonal factors will be less volatile, and we expect claims to gravitate back toward the 200,000 level once the Omicron wave passes.”
The four-week moving average for initial claims, which smooths out some of the volatility in the weekly numbers, was 231,000 – an increase of 20,000 from the previous week’s revised average.
And the total number of Americans currently collecting unemployment benefits – a metric known as “continuing claims” – hit 1.64 million during the week ending January 8, an increase of 84,000 from the previous week’s revised level.
Omicron infections have triggered a wave of workers calling in sick and led to flight cancellations and delays. While many economists see the variant denting the economy during this infection surge, the recovery is expected to remain on track.
Even though jobless claims rose last week, the biggest problem employers face right now is filing vacant positions and holding on to the workers they already have.
A record number of Americans quit their jobs in November while job openings continued to hover at near-record levels.