Unemployed claims rose by 23,000 last week from the previous one.
The number of Americans applying for unemployment benefits rose in the first week of January amid raging COVID-19 infections, but the number remains low by historical standards.
Unemployed claims in the United States – a power of attorney for retrenchments – rose by 23,000 last week to 230,000 for the week ending January 8, the U.S. Department of Labor said Thursday.
The four-week moving average, which smooths week-to-week blips, rose nearly 6,300 to nearly 211,000.
The rise in claims is likely due to the increase in Omicron infections that has led to a spate of flight cancellations and workers reporting sick. But analysts say the winds should disappear as Omicron, the latest variant of the coronavirus, goes its course.
“The rise in claims is likely to reflect an increase in retrenchments due to the increase in COVID cases, as seasonal adjustments worked in favor of a lower headline claims rate last week,” said Nancy Vanden Houten, chief economist at Oxford Economics. “Claims may continue to increase in the near term, but we expect initial claims to swing back to the 200,000 level once the Omicron wave is over.”
The US labor market has returned strongly from the 2020 coronavirus crisis and the ensuing recession. The country currently has an almost-record number of jobs and workers are so confident about their prospects that they say in record numbers “I quit”.
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.
A total of about 1.6 million people collected unemployment benefits in the week ending January 1 – quite the turnaround from the record high of 6.149 million in early April 2020.
But rising inflation concerns millions of Americans. Consumer prices rose 7 percent year-on-year in December, the largest increase since June 1982. Economists expect the Federal Reserve to raise interest rates in March – and possibly increase it three more times this year to cool rising prices.
When COVID-19 hit in March 2020 and government orders shutdowns, companies cut millions of jobs and the U.S. unemployment rate rose to 14.7 percent. Governments then injected trillions of stimulus funding to keep struggling economies going. This coupled with vaccine campaigns has helped the economy recover.
But companies are struggling to bring workers back and to find qualified employees to replace the scores that have resigned in recent months. Employers posted 10.6 million jobs at the end of November.
The U.S. workforce is about 2.2 million people smaller than before the coronavirus pandemic. Workers are increasingly confident about their job prospects.
And those in employment are encouraged to ask for a better deal from large corporations, a trend that has not been seen in the US for several decades. Corporate America Titans See More Challenges for Collective Bargaining, Including Coffee Chain Starbucks and grain manufacturer Kellogg.
Data continues underline the shift of balance of power between corporations and their workers.
A record 4.5 million workers quit their jobs in November, 4.2 million in October and 4.4 million in September. This phenomenon has been called “the Great Resignation” by economists.