• Continuing jobless claims jumped to 1.64 million
• Claims in California sharply rose but plunged in New York
The number of filings for new unemployment benefit claims in the United States has jumped to a three-month high last week, as the wave of COVID-19 infections from the Omicron variant disrupted business activity, constraining job growth this month.
The Labor Department on Thursday reported that initial filings for the week ended January 15 totaled 286,000, the highest level since mid-October. Wall Street was estimating 225,000 jobless claims.
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The number of people filed for claims jumped substantially from the previous week’s 231,000, and the increase was the largest since last July.
Moreover, the new claims numbers are influenced by unfavorable seasonal factors after the holidays, with surging Omicron infections. The United States is reporting an average of over 750,000 new coronavirus infections daily.
Bigger employment picture
Unadjusted claims fell 83,418 to 337,417 last week, even as it was anticipated that there would be a decrease of 138,773 due to seasonal factors.
Claims in California sharply rose 6,075 but plunged 14,011 in New York.
Total recipients of all unemployment benefit programs rose by 180,114 to 2.13 million, according to data through January 1.
Jobless claims data are seen as a critical real-time gauge of the employment picture, which has improved in some aspects compared to 2020 and early 2021 but is still beset by multiple trouble spots.
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Although the unemployment rate has fallen to 3.9% after a record year of nonfarm payroll growth, the total employment level remains below the pre-pandemic level of 2.9 million.
Labor force participation remains well below pre-pandemic levels, with the current 61.9% rate 1.5 percentage points below the pre-Covid level. The labor force has contracted by nearly 2.3 million during the period.
Picture Credit: USA Today