The number of new applications for unemployment benefits fell 30,000 last week to 260,000, in line with expectations and a sign that the omicron variant’s damage to the labor market is limited.
The jobless claims numbers reported on Thursday morning by the Labor Department suggest that layoffs have risen in recent weeks as the omicron variant spread through the country.
Claims rose higher earlier in January but now appeared headed back down to the very low levels seen in the fall, suggesting that employers are still desperate to hold on to labor.
“The first decline so far this year in seasonally adjusted new jobless claims is a welcome sign after three consecutive gains. Job security has been bolstered by significant improvement in the unemployment rate and solid rise in payrolls over the past year,” said Mark Hamrick, senior economic analyst at Bankrate.
Omicron has moved quickly through the country and world and has resulted in event cancellations and more remote work for businesses.
CONFIDENCE IN BIDEN ECONOMIC MANAGEMENT IS IN SHARP DECLINE, PEW POLL FINDS
The weekly jobless claims report follows a worse-than-expected December jobs report. The economy added just 199,000 new jobs in November, below forecasts, although the unemployment rate dipped below 4% for the first time since the pandemic began.
The country’s soaring inflation is also being closely examined. Consumer prices grew 7% in the year ending in December, the fastest pace since 1982, according to a report released by the Bureau of Labor Statistics.
Following a two-day meeting, officials with the Federal Reserve signaled that the first interest rate hike in years is on the horizon as it moves away from its coronavirus-era monetary position to curb inflation. The consensus is that the first rate hike will come in March and will be followed by several more hikes this year.
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“The economy no longer needs sustained high levels of monetary policy support,” Fed Chairman Jerome Powell said Wednesday, expressing optimism about the country’s economic trajectory.
