Saturday, June 10, 2023

US weekly jobless claims rise as Omicron spreads

Jobless claims increased by 23,000 last week compared to the previous week.

The number of Americans applying for unemployment benefits rose in the first week of January amid COVID-19 infections, but the number is still low by historical standards.

United States jobless claims – a proxy for layoffs – rose by 23,000 last week to 230,000 for the week ended January 8, the US Labor Department said Thursday.

The four-week moving average, which smoothes out week-to-week blips, rose from around 6,300 to around 211,000.

The increase in claims is likely due to a rise in Omicron infections that has led to a wave of flight cancellations and workers getting sick. But analysts say those headwinds should come to an end, as the latest version of the coronavirus runs its course, Omicron.

“The increase in claims reflects an increase in layoffs due to a rise in COVID cases, as seasonal adjustment factors worked in favor of lower title claims last week,” said Nancy Vanden Houten, principal economist at Oxford Economics. “Claims may remain high in the near term, but we expect initial claims to return to the 200,000 level once the Omicron wave passes.”

The US jobs market has made a strong comeback from the 2020 coronavirus crisis and the recession that followed. The country currently has an almost record number of job opportunities and workers are so confident about their prospects that they are saying “I quit” in record numbers.

The unemployment rate fell to a 22-month low of 3.9 percent in December, meaning the labor market is at or nearing maximum employment.

In all, about 1.6 million people were collecting unemployment benefits in the week ending January 1 – a marked reversal from the record high of 6.149 million in early April 2020.

However, rising inflation is worrying millions of Americans. Consumer prices rose 7 percent year-on-year in December, the biggest gain since June 1982. Economists expect the Federal Reserve to raise interest rates in March – and possibly raise them three more times this year to calm rising prices.

jobs abundant

When COVID-19 hit in March 2020 and governments ordered lockdowns, companies cut millions of jobs and the US unemployment rate soared to 14.7 percent. Governments then injected trillions in stimulus money to keep struggling economies afloat. That coupled with vaccine campaigns helped the economy bounce back.

But companies have been struggling to find qualified employees to bring back employees and replace scores that have resigned in recent months. Employers posted 10.6 million job openings at the end of November.

The US workforce is about 2.2 million smaller than it was before the coronavirus pandemic. Workers are more confident about their job prospects.

And job seekers are encouraged to ask for better deals from larger corporations, a trend not seen in America for several decades. Titans of corporate America are facing the challenges of collective bargaining, including coffee chain Starbucks and cereal maker Kellogg’s.

The data continues to underscore the shifting balance of power between corporations and their employees.

A record 45 lakh employees left their jobs in November, 42 lakh in October and 44 lakh in September. The event has been dubbed the “Great Resignation” by economists.


Nation World News Desk
Nation World News Desk
Nation World News is the fastest emerging news website covering all the latest news, world’s top stories, science news entertainment sports cricket’s latest discoveries, new technology gadgets, politics news, and more.
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