Omicron Job Loss? Unemployment Claims Unexpectedly Spike One Week After Steep Drop In Jobless Benefits Numbers

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The number of new unemployment claims jumped unexpectedly for the second week in a row this month despite a sharp drop in the total number of Americans receiving unemployment benefits – a concerning sign for a recovery in the labor market after experts warned of record growth. Cases of the fast-spreading Omicron variant-induced coronavirus could slow economic recovery.

important facts

According to the weekly, about 230,000 people filed initial jobless claims in the week ending January 8, 23,000 more than the previous week. statistics Released on Thursday.

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Economists were expecting only 200,000 new claims last week, according to data from Businesshala.

“This may be the first report that Omicron is causing new job losses,” Mark Hamrick, senior economic analyst at Bankrate, wrote in a Thursday note, adding that the biggest increases were reported in California and New York, where the total of new claims The number exceeded 20,000. Joint.

The new report also showed that the number of Americans receiving unemployment benefits fell by 1.6 million in the week ending January 1, a decrease of 194,000 from the previous week and the lowest level since June 1973.

important quotes

“The future course of the pandemic remains highly uncertain, but the overall job market story is one of shortages of available applicants and workers,” Hamrick said. “The latest wrinkle, the high level of individuals testing positive, being sick or living off work, has already added to the supply chain disruption with inflation running red-hot.”

main background

New unemployment data on Friday comes after a disappointing labor report showed the US added 199,000 jobs less than expected in December. Following the report, Hamrick said the economic impact of the Omicron version was “difficult to measure” at the time and warned against dismissing its potential, pointing to widespread worker shortages, in part by allaying concerns over the pandemic. , a great uncertainty remained. Economists surveyed by Bankrate said the version could weigh on job growth in the first three months of the year, but forecast the unemployment rate to fall from 3.9% to 3.8% in a year. Mark Zandi of Moody’s Analytics shared a similar warning, saying “the risks are mounting,” and predicting that the economic recovery “is set to soften” as Omicron stunts business. Amid the latest surge, credit card spending and restaurant bookings have already dropped significantly, while widespread flight cancellations are another economic concern, Zandi notes.

tangent line

So far, the US has recovered about 80% of the 20.5 million jobs American employers cut between March and April last year, according to the Labor Department.

Record 4.5 million Americans quit in November as employers struggle to retain workers (Businesshala)

December’s surprise job growth doesn’t tell the whole story – O’Micron faces ‘significant economic loss’Businesshala,

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