Applications for U.S. state unemployment insurance surged last week to a three-month high, suggesting that the omicron variant is having a bigger impact on the labor market.
Initial unemployment claims increased by 55,000 to 286,000 in the week ended Jan. 15, Labor Department data showed Thursday. The figure exceeded all estimates in a Bloomberg survey of economists. The report reflects the reference week for January employment data due early next month.
Continuing claims for state benefits rose to 1.64 million in the week ended Jan. 8.
The increase in applications may point to employers laying off staff during the most recent surge in Covid cases. Even so, the fallout should be short-lived as companies are desperate to retain and attract talent amid ongoing labor shortages.
What Bloomberg Economics Says...
“Jobless claims swelled last week due to temporary business closures, suggesting a hiring slowdown amid the highly infectious omicron strain... The broader economy has slowed recently with omicron discouraging many people from traveling or eating out, but the hit seems to have bottomed out.”
--Eliza Winger, economist
