Thursday, February 3, 2022

Jobless claims: Omicron still rules the roost, but effects abating


 - by New Deal democrat

It is clear that Omicron has continued to result in increased layoffs, but the effect is probably abating.

New claims declined 23,000 last week to 238,000 - still well above its pandemic low of 188,000 set early in December, but also a big retreat from 290,000 two weeks ago. The 4 week average of new claims increased 7,750 to 255,000:

Continuing claims for jobless benefits declined by 44,000 from 1,672,000 to 1,628,000, an increase of 73,000 from its 50 year low of 1,555,000 three weeks ago:

As I have written for several weeks, the effects of Omicron are going to continue for at least a few more weeks. At this point it’s pretty clear that Omicron has had a significant impact, and may even result in a negative jobs number for January in tomorrow’s nonfarm payrolls report. 

But with cases nationwide down by over 50% from peak as of today, I still suspect Omicron will be mainly behind us by the end of February. So I still do not see a big reason to overreact to the recent increase in claims. After all, in comparison with the past few decades or even past 5 years, 238,000 is a darn good number.