The number of new applications for unemployment benefits climbed 55,000 last week to 286,000, more than anticipated.
The numbers were reported on Thursday morning by the Labor Department. Weekly jobless claims are seen as a proxy for layoffs and have been watched closely in recent weeks to gauge the labor market damage caused by the omicron variant of the coronavirus.
“This is clearly a setback for seasonally adjusted new claims, rising to a level last seen in October,” said Mark Hamrick, senior economic analyst for Bankrate. “After having notched the lowest levels in decades, new claims are moving in the wrong direction. Omicron deserves suspicion for some new job loss, with pressures being seen both on the labor demand and supply sides.”
Omicron has moved quickly through the country and world and has resulted in event cancellations and more remote work for businesses. While it appears the contagion might be peaking in some parts of the country, hospitalizations are up 47% from two weeks ago, and deaths have risen 43% over that same period. While omicron appears to be more contagious than previous iterations of the virus, it is also believed to be less deadly.
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Adding some anxiety into the mix is 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.
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All eyes are also on the country’s soaring inflation. 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 this month. Because of the inflation, the Federal Reserve is gearing up to hike interest rates several times this year.
