Jobless claims fall as labor market is overtaken by Omicron disruptions

The Labor Department said Thursday that initial jobless claims, a proxy for layoffs, fell to a seasonally adjusted 223,000 for the week ended February, down from a revised 239,000 a week earlier. The four-week moving average, reducing volatility, also fell.

As the Omicron edition reported last month Covid-19 cases escalated, millions of workers were said to be sick and businesses temporarily closed due to the outbreak. Jobless claims rose sharply but temporarily in mid-January, while private sector projections showed job opportunities began to shrink that month.

Still, US employers hired at a strong pace in January, the Labor Department said last week, adding 467,000 jobs, according to the Omicron version. Economists say strong labor demand will continue to be a hallmark of the US labor market through 2022.

Continuing claims, a proxy for the total number of people receiving unemployment benefits through regular state programs, remained the same for the week ended January 29 – well below pre-pandemic levels. Continuous claims are reported with an interval of one week.

Recently, Covid-19 cases and hospitalizations have started rising and some states have already announced plans to ease the COVID-19 restrictions.

Stephen Juno, senior U.S. economist at Bank of America, said, “It looks like we are putting Omicron in the back view. Labor market conditions are still the same as they were before Omicron: strong demand for labor and supply that Going forward. Come back slowly.”

Mr Juneau said wages rose 5.7% in January, almost double the average of about 3% before the pandemic, which speaks to the efforts made by businesses to attract and retain workers.

Dan Watkins, owner of All Four Seasons Garage and Entry Doors, an installation company based in the Atlanta area, said he is struggling to keep workers hired for his location in Nashville. Mr Watkins said he has made it a priority to retain existing employees by becoming more flexible and raising wages.

“You have to give them more flexibility in terms of timing, leave an hour earlier if they need it, or give them no more paying time off to work for you,” he said.

Mr Watkins said that in addition to supply-chain constraints and the high cost of freight, raising wages has forced him to pass those costs on to his customers, which he said is about 80% higher than before the pandemic. are charging. He notes that what he pays for the door has more than doubled.

“I would say the current prices have probably put 15% of people out of the market,” Mr Watkins said.