First-Time Unemployment Claims Rise as Omicron Affects Job Market

The number of people seeking new unemployment benefits has been dropping, or at least holding relatively steady, the last few months.

So much for that streak.

The number of U.S. workers applying for first-time unemployment benefits rose to some 286,000 last week, the highest that number has been in the last three months, as the omicron variant of COVID-19 continues to send case counts skyrocketing.

It’s the third straight week claims have risen, this time by some 55,000, according to statistics released Thursday by the Labor Department. It’s the most that statistic has jumped since mid-July.

The four-week average of claims rose by 20,000 to 231,000. That’s the highest total for that statistic since late November.

Economists attributed the jump in part to the rise in coronavirus cases.

“The rise in claims reflects both an increase in layoffs due to the surge in Covid cases as well as an added boost from large seasonal adjustment factors,” Nancy Vanden Houten, lead U.S. economist with Oxford Economics, said in a report, according to CBS News.

The latest COVID-19 surge has weighed on the strong comeback from the coronavirus recession of 2020, the network reported. Jobless claims had fallen steadily for about a year, in late 2021 year dipping below the pre-pandemic average of around 220,000 a week.

In the first week of January, nearly 9 million people said they weren’t working because they had COVID-19 or were caring for someone who had tested positive, according to the Census Bureau. That’s triple the number from mid-December, according to CBS.

Overall, the job market remains tight as illness and care work keep workers out of the labor force, putting pressure on businesses. Employers posted 10.6 million job openings in November, the fifth-highest monthly total in records going back to 2000. A record 4.5 million workers quit their jobs in November, indicating they are confident enough to look something better.

The unemployment rate fell last month to a pandemic low of 3.9%.