Economic Report: U.S. jobless claims drop 30,000 to 260,000 as omicron wave fades
The numbers: New applications for U.S. unemployment benefits fell by 30,000 last week to 260,000, signaling that disruptions in the labor market tied to omicron are starting to fade.
Economists polled by The Wall Street Journal had forecast initial jobless claims to total a seasonally adjusted 265,000.
New jobless claims have been unusually erratic in the wake of the holiday shopping season and a record wave of omicron cases, economists say, making them less useful as barometer of labor-market conditions.
A monthly average of jobless claims that smooths out the weekly ups and downs totaled 247,000, the Labor Department said Thursday. And raw or unadjusted claims clocked in at a 267,573.
Big picture: Millions of people have missed time from work either because they were sick or taking care of people who were sick during the omicron flareup. The outbreak may have also spurred some more temporary layoffs.
Yet most companies are still trying to hire and omicron is starting to recede. Business leaders expect the economy to speed up again as the latest outbreak recedes.
Key details: New claims in the week ended Jan. 22 fell the most in Pennsylvania, New York, New Jersey and Illinois — all states that experience big coronavirus surges in December and early January. a
Not a single state reported a big increase in new unemployment claims.
The number of people already collecting unemployment benefits, meanwhile, rose by 51,000 to 1.68 million. These so-called continuing claims have returned to pre-crisis levels and are extremely low, however.
Looking ahead: “The downtrend will likely continue given demand for labor remains strong and businesses remain reluctant to lay off workers amid a persistent labor shortage,” said Rubeela Farooqi, chief U.S. economist at High Frequency Economics.
Market reaction: The Dow Jones Industrial Average DJIA, -0.38% and S&P 500 SPX, -0.15% were set to open higher in Thursday trades. Stocks fell the day before after the Federal Reserve indicated it could raise interest rates as early as March.