US initial jobless claims remain below pre-pandemic level despite Omicron wave

• Financial

On Thursday, data from US Labor Department had unmasked that the number of Americans filing for first-time state unemployment benefits spiked to a fresh two-month peak over the first working week of 2022, as a rapid spread in Omicron cases appeared to have prompted more Americans to stay at home, however, initial claims have still been chartering well-below a pre-pandemic level.

Adding a silver lining to a US economy which has long been grappling with a gargantuan inflation-surge, Thursday’s Labor Department data had offered evidences that the US core inflation might be peaking, as US producer prices index had reported its smallest gain more than a year last month, rising 0.2 per cent in December.

However, on an annualized basis, over past twelve months through December, US producer prices index soared by 9.7 per cent compared to a year earlier. Nonetheless, latest uptick in US initial jobless claims came forth as an omicron wave has reportedly been ravaging parts of the world’s largest economy, however, an acceleration in vaccination program earlier last year alongside an introduction of booster jabs had dwarfed the extent of illness.

US initial jobless claims rose last week

According to US Labour Department data, US initial jobless claims rose 23,000 to a seasonally adjusted 230,000 filings last week, while continuing claims dipped to 1.559 million, the lowest since onset of the pandemic outbreak, suggesting a roaring US labor market which might have already reached maximum employment.

Usually, an initial jobless claims figure between 200,000 and 250,000 is contemplated as a sign of a salubrious labor market. Meanwhile, addressing to a rise in pandemic cases across the United States, “The rise in claims likely reflects an increase in layoffs due to the surge in COVID cases.

Claims may remain elevated in the near term, but we expect they will gravitate back to the 200,000 level once the Omicron wave passes”.