First -time unemployment filings were lower for the first time in four weeks after hitting a three -month high in the previous reading, suggesting that some of the delays associated with Omicron have recently weighed on recovery. of the labor market may weaken.
The Department of Labor released its weekly report of unemployment claims at 8:30 am ET on Thursday. Here are the key metrics from the print, compared to the consensus estimates compiled by Bloomberg:
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Preliminary unemployment claim, week ended Jan. 22: 260,000 vs. 265,000 were expected and upwards changed from 290,000 last week
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Ongoing claim, week ended Jan. 15: 1.675 million compared to 1.655 million expected and downwardly changed to 1.624 million last week
The agency’s latest printing fell to a better-than-expected 260,000 from last week’s count, reflecting the third consecutive increase for initial jobless claims and another decrease in the months-down trajectory of filing. Claims from the previous read came close to the 300,000 level at 286,000 in an unexpected jump from the revised tally of 231,000.
The rush among U.S. workers applying for unemployment insurance has been attributed to delays from the Omicron COVID-19 variant and adjusted workforce following the seasonal increase in hiring during the holiday season. In December, claims reached a half -century low of 188,000 as employers attempted to keep workers amid labor shortages.
“The surge in COVID cases has created new headwinds for the economy even as tailwinds, including federal government fiscal increases, are weakening,” said Bankrate senior economic analyst Mark Hamrick on a note. “The disastrous combination of supply chain barriers and the shortage, or lack of availability, of workers in the midst of the Omicron surge is weighing on the country’s economic recovery.”
The ongoing claim, which tracks filers who still collect regular state unemployment benefits, also rose sharply last week to more than 1.6 million.
Although the spread of Omicron may slow, payrolls will be slower to respond to falling COVID cases than real-time activity data, according to Pantheon Macroeconomics Chief Economist Ian Shepherdson.
Last week’s snapshot coincides with the survey period for January’s “primary” unemployment, set for release in early February. Hamrick pointed out that the slowdowns in job creation or restoration in November and December resulted in an average of 224,000 jobs being added to payrolls, compared to 537,000 per month for the full year.
“It’s hard to make the case for a big hiring acceleration this month,” he said.
The unemployment report in December came in at a miss of more than 250,000 to 199,000 compared to the 450,000 jobs added experts had expected. Although the labor market posted its 12th consecutive month of job growth, muted service hiring weighed on broader job growth. Economists also suggested that the January report could see a more significant impact associated with Omicron on monthly labor market data.
Despite the recent slowdown in the labor market recovery, the Conference Board’s recent analysis of consumer sentiment indicated that respondents remained optimistic about the labor market recovery in recent times, but less about conditions in the coming years. Of survey participants who responded to the portion of the study that tracks perceptions about labor market conditions, 22.7% said they expect more jobs in the future, up from 24.2% in December. Meanwhile, 15.7% expected less work in six months, up from 14.7%.
“Although the surge in Omicron cases is temporarily closing businesses, consumers’ perceptions about the labor market remain positive, likely showing hope that the effects of the variant will be temporary,” he said. wrote High Frequency Economics Chief of the US Economist Rubeela Farooqi in a note.
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Alexandra Semenova is a reporter for Yahoo Finance. Follow him on Twitter @alexandraandnyc
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