Jobless claims surge due to spike in Covid-19 cases

•         Initial jobless claims increase to 230,00 last week

•         The 4-week moving average edge up to 210,750

The number of people claiming unemployment benefits in the United States increased last week, though it remained near the pandemic low for the past two months.

The Labour Department reported on Thursday 230,000, a substantial increase of 23,000 from the previous week's unrevised level of 207,000. 

Economists polled by The Wall Street Journal anticipate that first jobless claims remained stable at a seasonally adjusted 200,000 for the week that ended Jan. 8.

Read more: US inflation reaches 7% in December, highest since 1982

The 4-week moving average was 210,750, an increase of 6,250 from the previous week's unrevised average of 204,500. 

The advance seasonally adjusted insured unemployment rate was 1.1 percent for the week ending January 1, a decrease of 0.2 percentage point from the previous week's unrevised rate. 

Read more: IMF chief warns of global economic unrest as central banks raise rates to combat inflation

The rise in the number of Americans claiming unemployment benefits shows that the recently discovered Omicron version of Covid-19 is possessing a danger to the labor market and the entire economy.

Job Creation 

U.S. employment rose at a steady rate in December amid worker shortages and is expected to remain moderate as Covid-19 infections rise exponentially.

Read more: JPMorgan CEO sees 2022 could have best economic growth in decades, with more than four rate hikes

Nonfarm payrolls increased by 199,000 jobs last month, the Labor Department said on Friday. November’s data was also revised to 249,000 jobs instead of 210,000, as earlier reported while the unemployment rate fell to 3.9% from 4.2%.

Picture Credits: CNBC