US jobless claims increase but hover near historic low

• The 4-week moving average edges down to 243,250

• The advance seasonally adjusted insured unemployment rate is 1.2 %

The number of new unemployment benefit claims filed in the United States increased last week to 248,000, indicating a tight job market after the Omicron variant interrupted corporate operations. 

The Labour Department reported on Thursday a substantial increase of 23,000 from the previous week's revised level. The previous week's level was revised up by 2,000 from 223,000 to 225,000. 

However, economists polled by Bloomberg expected the claims to fall to 218,000. 

Read more: US consumer sentiment sinks in early February amid inflation concerns

Applications fell after a recent rise in response to an increase in Covid-19 cases across the country. Claims have generally decreased in the last year as businesses have struggled to maintain and attract personnel in the face of chronic labor shortages, Bloomberg stated. 

The increase in applications is most likely a one-time blip following three weeks of reductions as the job market rebounds from the omicron variation.

The 4-week moving average was 243,250, a decrease of 10,500 from the previous week's revised average. The previous week's average was revised up by 500 from 253,250 to 253,750. 

Read more: US inflation reaches 7.5 % in January, highest since February 1982

The advance seasonally adjusted insured unemployment rate was 1.2 percent for the week ending February 5, unchanged from the previous week's unrevised rate.

Job Creation 

According to the Labor Department, the US economy created 467,000 jobs in January. 

In January, the unemployment rate increased from 3.9 % to 4 %. As a result, earnings increased 5.7 % year on year in January, nearly double the pre-pandemic norm of approximately 3 %.

Read more: US consumer debt totals $15.6 trillion in 2021, record increase in 18 years

The increase in instances related to the Omicron variation exacerbated the labor crisis by causing workers to call in sick. In January, around 3.6 million Americans were employed but away from work owing to sickness. 

Picture Credits: FT