US jobless claims rise unexpectedly

The number of Americans who filed new unemployment benefit claims unexpectedly increased in the first week of January amid a wave of Covid-19 infections, but remained at a level consistent with increasingly tight labor market conditions.

Initial jobless claims rose by 23,000 to 230,000 seasonally adjusted for the week ended Jan. 8, the Labor Department said on Thursday. Economists polled by Reuters predicted 200,000 claims for the last week.

Requests remain below their pre-pandemic level, a sign of tightening labor market conditions. Orders were down from a record 6.149 million reached in April 2020.

Claims for unemployment benefits remain very low, despite a surge in coronavirus cases driven by the Ômicron variant, which has disrupted activities in areas ranging from airlines to schools. Employers are holding back their workers, with a picture of 10.6 million jobs open at the end of November.

The US government said last Friday that the unemployment rate fell to a 22-month low of 3.9% in December, an indication that the labor market is at or close to full employment.

The US workforce is about 2.2 million fewer people than it was before the pandemic.

Released on Wednesday, the Federal Reserve’s “Beige Book” report — a compilation of information on business activity gathered from data from business contacts across the country as of January 3 — showed that many employers are allowing part-time work or adjusting qualifications “to attract more candidates and retain the existing workforce”.

A tight labor market and rising inflation are leading economists to estimate that the Fed will raise interest rates in March. US consumer prices jumped 7% in December from a year earlier, the biggest gain since June 1982.

Disclaimer: If you need to update/edit/remove this news or article then please contact our support team Learn more