First-time unemployment filings ticked lower for the first time in four weeks after notching a three-month high in the previous reading, suggesting some of the Omicron-related disruptions that have recently weighed on the labor market's recovery may be easing.
The Labor Department released its weekly jobless claims report at 8:30 a.m. ET on Thursday. Here were the main metrics from the print, compared to consensus estimates compiled by Bloomberg:
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Initial jobless claims, week ended Jan. 22: 260,000 vs. 265,000 expected and upwardly revised to 290,000 during prior week
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Continuing claims, week ended Jan. 15: 1.675 million vs. 1.655 million expected and downwardly revised to 1.624 million during prior week
The agency’s latest print fell to a better-than-expected 260,000 from the previous week's figure, which reflected the third straight increase for initial jobless claims and another dent in the months-long downward trajectory of filings. Claims from the prior read came in near the 300,000 level at 286,000 in an unexpected jump from the revised tally of 231,000.
A rush in U.S. workers applying for unemployment insurance was attributed to disruptions from the Omicron COVID-19 variant and adjusted workforces following the seasonal hiring increase during the holidays. In December, claims reached a half-century low of 188,000 as employers attempted to retain workers amid labor shortages.
“The surge in COVID cases has created new headwinds for the economy even as tailwinds, including the federal government’s fiscal boosts, are waning,” Bankrate senior economic analyst Mark Hamrick said in a note. “The detrimental combination of supply chain constraints and the shortage, or lack of availability, of workers amid the Omicron surge is weighing on the nation’s economic recovery.”
Continuing claims, which tracks filers still collecting regular state unemployment benefits, were also up sharply last week to more than 1.6 million.
Even as Omicron’s spread may be slowing, payrolls will be a bit slower to respond to falling COVID cases than the real-time activity data, according to Pantheon Macroeconomics Chief Economist Ian Shepherdson.
The previous week’s snapshot coincided with the survey period for January’s “main” unemployment, set for release in early February. Hamrick pointed out that slowdowns in job creation or restoration in November and December resulted in an average 224,000 jobs added to payrolls, compared to 537,000 per month for the full year.
“It is hard to make the case for a huge acceleration in hiring this month,” he said.