New claims for US unemployment benefits fell in the week leading up to Christmas and benefits rolls slid to their lowest level of the coronavirus pandemic era the week earlier, the Labor Department said on Thursday, data that showed no impact yet on employment from the rapidly spreading Omicron variant.
Initial claims for state unemployment benefits dropped to a seasonally adjusted 198,000 for the week ended Dec. 25 from a revised 206,000 a week earlier. Early this month, claims dropped to a level last seen in 1969.
Economists polled by Reuters had forecast 208,000 applications for the latest week. Claims have declined from a record high of 6.149 million in early April of 2020.
The data were the latest to show that Omicron – the newest and most contagious COVID-19 variant so far – has yet to trip up a tight job market or slow a US economy that appears solidly on track to end the year at a gangbusters growth rate.
While the initial claims data was depressed by so-called seasonal adjustment factors, even the nonseasonally adjusted figures – while roughly 60,000 higher – showed almost no week-over-week change.
“The fact that NSA claims were unchanged – at a time when they typically tend to deteriorate – suggests that there has been no impact from Omicron as of yet,” economists Thomas Simons and AnetaMarkowska at Jefferies wrote.
The figures – among the most timely reading on the health of the labor market – also showed the number of people on benefits beyond the first week fell to 1.716 million in the week ended Dec. 18, the lowest since the week of March 7, 2020. That essentially marks a return to the level that prevailed before the first wave of COVID-19 lockdowns later that month sent unemployment rolls soaring.
“We expect continued claims to come in more consistently around 1.7 million given the low level of initial claims and as more individuals return to work as health conditions improve, although the Omicron variant might slow that process,” Nancy Vanden Houten, lead economist at Oxford Economics wrote.
Applications typically increase during the cold weather months, but an acute shortage of workers has disrupted that seasonal pattern, resulting in lower seasonally adjusted claims numbers in recent weeks.
