The number of Americans filing new claims for unemployment benefits unexpectedly rose last week as soaring COVID-19 infections forced some businesses into de facto lockdowns.
Initial claims for state unemployment benefits increased 7,000 to a seasonally adjusted 207,000 for the week ended January 1, the Labor Department said on Thursday.
The increase was unexpected but still moderate, and jobless claims remain at historically low levels after more than a year of elevated layoffs during the pandemic.
The labor market is tightening amid an acute shortage of workers. With coronavirus infection, driven by the Omicron variant, expected to peak soon, a substantial rise in claims is unlikely.
Initial claims for state unemployment benefits increased 7,000 to a seasonally adjusted 207,000 for the week ended January 1
A 'Now Hiring' sign is placed on the glass store front of a store in Montebello, California, amid a nationwide labor shortage last month
'It is possible that the recent spread of COVID has put that earlier downward trend on hold,' said Daniel Silver, an economist at JPMorgan in New York. 'That said, it is an encouraging sign for the labor market that claims have not meaningfully jumped in response so far.'
Claims hovered around 200,000 for much of December, below the pre-pandemic average of around 250,000. They have declined from a record high of 6.149 million in early April 2020.
Altogether, nearly 1.8 million Americans were collecting traditional unemployment aid the week that ended December 25.
Unadjusted claims shot up 57,599 to 315,469 last week. There were driven by a surge in New York, which is experiencing an explosion of cases. There were also large increases in filings in Pennsylvania, Washington state, Michigan and Connecticut.
The United States reported more than 1 million new coronavirus cases on Monday, the highest daily tally of any country in the world.
Some school districts are suspending in-person learning, which could force some working parents to assume childcare duties. Workers calling in sick are causing some businesses to either temporarily close or scale back services.
Thousands of airline flights have been canceled. Disruptions caused by the spiraling Omicron infections, together with relentless input shortages, curbed services sector activity in December, a separate report showed on Thursday.
Travelers make their way through Miami International Airport on December 28, 2021 in Miami, Florida. Thousands of airline flights have been canceled in recent weeks
CityMD, which is one of the most popular testing businesses, temporarily closed 13 locations in New York last month due to staffing issues amid a surge in demand
The Institute for Supply Management said its non-manufacturing activity index fell to 62.0 last month from 69.1 in November, which was the highest reading since the
