Jobless claims unexpectedly rise to 286,000, highest since October
Applications for the week that ended on Jan. 15 jumped to 286,000
Economy adds 199,000 jobs in December
Slatestone Chief market strategist Kenny Polcari discusses the impact the ‘disappointing’ jobs report has on the market.
The number of Americans filing for unemployment benefits unexpectedly climbed to the highest level since mid-October as an unprecedented surge in COVID-19 cases driven by the highly contagious omicron variant threatened to undermine the economy's recovery.
Figures released Thursday by the Labor Department show that applications for the week that ended on Jan. 15 jumped to 286,000 from a revised 231,000 a week earlier, sharply missing the 220,000 forecast by Refinitiv analysts.
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Continuing claims, or the number of Americans who are consecutively receiving unemployment aid, rose to 1.635 million, an increase of 84,000 from the week's previous level.
The report shows that roughly 2.13 million Americans were collecting jobless benefits for the week ending Jan. 1, an increase of 180,114 from the previous week; by comparison, just a little over one year ago, an estimated 16.94 million Americans were receiving benefits.
Claims have largely moderated near pre-pandemic levels as the economy recovers and Americans continue traveling, shopping and eating out. Businesses have struggled to keep up with the demand, however, and have reported difficulties in onboarding new employees. Thursday's report suggests that companies are making an effort to retain the workers they already have.
A man wearing a mask walks past a "now hiring" sign on Melrose Avenue amid the coronavirus pandemic on April 22, 2021, in Los Angeles, California. (Alexi Rosenfeld/Getty Images / Getty Images)
The Labor Department reported earlier this month that there were 10.6 million open jobs at the end of November. Though a slight decline from October, it's still a staggeringly high figure; there are about 3.7 million more open jobs than unemployed Americans looking for work.
But there is growing unease on Capitol Hill over a stunning rise in cases driven by the highly transmissible omicron variant. The U.S. is now reporting a seven-day moving average of more than 122,000 cases.
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While it's still unclear what the fast-spreading variant will ultimately mean for the health of the economy, its effects on daily life have already been felt. Thousands of flights have been canceled, Broadway shows are shuttering their doors and a growing number of schools have postponed reopenings. The White House has maintained that it has the resources needed to respond to any disruptions caused by the omicron spread.
"Weekly unemployment claims jumped 55,000 in the most recent week, and even with the usual noise in the numbers they seem to reflect the record rise in COVID-19 cases from omicron," said Robert Frick, corporate economist at Navy Federal Credit Union. "Fortunately, omicron is peaking and if past patterns hold, claims should drop quickly in the next two to three weeks."