US jobless claims jump to 230K during Omicron surge



The number of US workers filing unemployment claims ticked higher this week as employers contend with the ongoing Omicron variant surge, according to weekly data on jobless claims released Thursday.

Data released by the Labor Department showed 230,000 initial jobless claims for the week ending on Jan. 8. The tally was up from last week’s 207,000 claims.

The jobless claims number was higher than expected and jumped to their highest since November.

Economists had projected 200,000 initial jobless claims for the week.

The four-week moving average of jobless claims was 210,750, up 6,250 from the previous week’s average of 204,500. The moving average addresses volatility in the weekly numbers.

Approximately 1.56 million Americans were claiming unemployment benefits for the week ending on Jan. 1. That was a decrease of 194,000 compared to the previous week.

The weekly jobless claims report is considered a marker for the number of layoffs within the US economy. Terminations have slowed in recent months, reaching their lowest level in decades, with employers locked in competition for talent in a tight labor market.

Jobless claims graph
Workers in lower-income sectors have been quitting roles in search of better pay and benefits.
US Dept. of Labor

For employers, the recent record surge of COVID-19 cases driven by the Omicron variant could result in further staffing shortages. Businesses across various sectors, includes airlines and grocery chains, have seen an uptick in employees calling out sick.

“Unfortunately, the Omicron COVID wave has added a new thread of disruption to supply chains and the availability of workers, many of whom are ill, testing positive or otherwise unable or unwilling to report to work,” senior economic analyst Mark Hamrick said.

While the US economy added just 199,000 jobs in December, missing expectations, the unemployment rate fell to just 3.9% — close to what the Federal Reserve considers to be maximum employment.

Help wanted sign.
The surge in COVID-19 cases driven by the Omicron variant has resulted in staffing shortages as more employees are calling out sick.
Robert Nickelsberg/Getty Images

Employers listed 10.6 million job openings in November, according to the Labor Department. Meanwhile, a record 4.5 million workers quit their jobs as part of an ongoing trend dubbed the “Great Resignation.”

Earlier this week, a member of the White House’s National Economic Council argued the “Great Resignation” was actually the “Great Upgrade,” with workers in lower-income sectors quitting roles in search of better pay and benefits.


Source link