With seasonality behind us, it is apparent that Omicron has resulted in increased layoffs.
New claims declined 30,000 last week to 260,000 – still well above its pandemic low of 188,000 set early in December. The 4 week average of new claims increased 15,000 to 247,000:
Continuing claims for jobless benefits rose for the second week in a row, by 51,000 to 1,575,000, 120,000 above its 50 year low set two weeks ago:
Last week I wrote “The effects of Omicron are going to continue for at least a few more weeks. The quirks of seasonality should resolve after another week. Until I see more going on, I do not see any reason to overreact to the last two weeks’ big increase in claims.” At this point, it seems clear that Omicron has had a significant impact. At the same time, with cases nationwide down 20% from the peak as of today, I still suspect Omicron will be behind us by the end of February. So I still do not see a big reason to overreact to this increase in claims, to what is still in the long run an excellent number.