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US jobless claims jump to 286K as Omicron hits employers

The number of American workers filing unemployment claims jumped much more than expected this week as US companies and employees contend with the Omicron variant, according to data released Thursday. Workers filed 286,000 initial jobless claims for the week ending on Jan. 15, the Labor Department said. The number of claims increased compared to the previous week’s revised tally of 231,000 claims. The number of jobless claims was the highest since October. Economists had projected approximately 225,000 initial jobless claims this week, according to Dow Jones. The four-week moving average of jobless claims was 231,000, up 20,000 compared to the previous week’s revised average. The moving average smooths out volatility in the weekly claims figure. Approximately 1.64 million Americans were claiming continuing unemployment benefits for the week ending on Jan. 8. Jobless claims, which are considered a proxy for layoffs, have ticked upward in recent weeks as a surge of COVID-19 cases adds renewed pressure for businesses. New jobless claims hit a 52-year low of just 188,000 in data released on Dec. 4. But the unemployment numbers have stayed at or below pre-pandemic levels as employers grapple with a competitive labor market. The tight labor market has prompted solid wage growth, with average hourly wages rising 4.7 percent in December compared to the same month one year earlier. However, surging inflation, which recently hit a four-decade high of 7 percent, has effectively erased those gains as workers pay more for everyday goods. “Broadly, the job market is still seen as tight while supply chain disruptions remain a major concern and irritant in this high inflation environment,” Bankrate senior economic analyst Mark Hamrick said. The unemployment rate dropped to 3.9 percent in the December jobs report, despite data that showed the US added just 199,000 jobs for the month. “Just a few weeks from now, we’ll learn whether the recent slowdown in hiring persists even as the nation’s unemployment rate has edged closer to the pre-pandemic low of 3.5 percent,” Hamrick added.

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