WASHINGTON – After three consistent weeks of unemployment filings that rose in tandem with the surging Omicron variant, very few Americans claimed unemployment benefits making it a second consecutive week in a row.
On Thursday, the US Labor Department reported that the unemployment claims declined by 23000, after surging to 238000 and 261000 earlier this month.
The 4-week jobless claims average, which recompenses for weekly volatility, hiked by 8000 to 255,000, making it the 5th consecutive week of increase in the average. At the same time, it mirrors a spike in Omicron cases in some states of the country.
In November, the unemployment claims hit the pre-Covid lows following rising to 6 million at the beginning of the Covid in 2020. Later in December, the record again hit a low as business owners held on to laborers due to persistent workers shortage.
The initial decline in unemployment claims could be an encouraging signal ahead of Jan jobless report, which is anticipated to reveal slower job gains due to the Omicron disruption last month.
As per The Wall Street Journal’s expectation, employers offered 150,000 jobs in the previous month, however, several contemplate that payroll fell in January. That would project a sharp fall in monthly average employment growth of 537,000 last month.
“If we see initial claims fall, that would be an indication that the hit to the economy and the labor market in particular from the Omicron wave is fading,” said PNC Financial Services Group’s chief economist, Gus Faucher. “Initial claims numbers will continue to drift down over the next month or two”, he expects.
Mr. Faucher has predicted the employment rate to fall by 400,000 in January. However, he pictures the job market bouncing back comparatively faster once Omicron cases come down further.
“The demand for labor is still very strong,” he stated.
Capital Economics’ senior economist, Michael Pearce said, he “expected weak payrolls performance would be made up quickly in the coming months”.
“Other economic indicators point to a healthy labor market in which jobs are plentiful and employers are struggling to lure workers”, he added.
According to the labor market stats released earlier this week, job openings were increased from 10.8 million in Nov to 10.9 million in December. While discharges and layoffs fell to 1.2 million apart from the 4.3 million job quits in December.
“It’s still workers quitting in record numbers and firms holding on to everyone else they’ve got,” said Mr. Pearce. “That is consistent with low numbers of initial jobless claims”, he added.
