Filings for unemployment benefits fell last week, showing a tight labor market with low layoffs and plentiful job openings even in the face of disruptions caused by the Omicron variant of Covid-19.
Initial jobless claims, a proxy for layoffs, fell to 260,000 for the week ended Jan. 22, a decrease of 30,000 from the revised level the week before, the Labor Department said Thursday. A gauge of those on jobless rolls fell to the lowest level since 1973.
“Employers are still doing a lot to try to keep workers on staff because they know it’s hard to hire right now,” said Aaron Sojourner, an economist at the University of Minnesota. He described employees unexpectedly missing work because of Covid-19 as the biggest consequence of the surge in cases.
After declining through most of 2021, the number of new claims reached the lowest point in five decades by December. More recently, claims had moved higher as the Omicron variant began to ratchet up the number of Covid-19 cases throughout the country, causing some workers to call in sick, businesses to temporarily shut down and schools to pivot to online learning.
Still, claims are well down from a year ago, when more than 800,000 applications were filed a week.
Continuing jobless claims, a proxy for those receiving unemployment benefits through regular state programs, have been trending down since a May 2020 peak. Thursday’s report showed the four-week moving average of continuing claims fell to the lowest level since August 1973, for the week ended Jan. 15. Continuing claims are reported with a week lag.
Job openings, quits and hires were at or near record highs in November, indicating a tight labor market with a lot of churn. Mr. Sojourner said that the Omicron variant has likely slowed the labor market’s recovery, but he expects it to quickly resume once the current surge of Covid-19 cases passes.
The sharp increase in claims in early January was likely due to workers filing for unemployment benefits because they got sick, said David Mericle, chief U.S. economist at Goldman Sachs’s Global Investment Research. In certain instances, workers are able to apply for unemployment benefits if they are on unpaid sick leave, even if they don’t separate from their employer.
“With labor demand so strong, I’m doubtful that many of these people are really losing their jobs,” Mr. Mericle said. “And even if they are…they presumably are able to find new ones pretty easily.”
Write to Bryan Mena at [email protected]
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
Appeared in the January 28, 2022, print edition as ‘New Unemployment Claims Fall.’
