New filings for jobless claims fell to 260,000 last week, following the 14-week high of 290,000 in the previous week, as COVID-19 cases continued to retreat from their recent record high, according to government data released Thursday.
Still, it marked the third week in a row that new jobless claims stayed above the pre-pandemic level, which was 218,000 in 2019.
The impact of the highly contagious omicron variant on jobless claims has been reduced significantly by the tight labor market.
By now, we can expect that the impact of the omicron wave will look a lot like the delta wave last August and September—as the virus retreats, a reduction in new claims follows.
The reading for new jobless claims for the week ending Jan. 22 will not play a part in next Friday’s jobs report for January from the Bureau of Labor Statistics—whose data is based on the second week’s payroll of the month.
The last data point that is important will be the 14-week high number, which was revised upwardly to 290,000 from the earlier estimate of 286,000.
If omicron can affect layoffs—which have been kept low by the tight labor market—it certainly has spilled over to hiring as we expect more downside risks to next week’s jobs number.
Our measure of the 13-week moving average for new claims last week ticked down slightly to 232,000 and remained significantly lower than the top-line number.
Barring any new shock to the labor market, we expect initial jobless claims to trend downward in the coming weeks.