Jobless Claims Back to Pre-COVID Norm for Second Week

Holidays, Omicron Obscure Meaning of Latest Data

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For the second straight week, the number of people initiating a claim for unemployment benefits was back below pandemic-era levels, a fragile but encouraging sign the job market is getting closer to a full recovery.

There were 222,000 initial jobless claims last week, 28,000 more than the previous week, but still better than any other time since the pandemic first gripped the economy and triggered massive layoffs, according to seasonally adjusted data released by the Department of Labor Thursday. Claims started to creep up in mid-March of last year, when they rose to 256,000, and soared as high as 6.15 million in one week that April.

Although the milestone is a positive sign that the labor market is truly healing, economists are not yet declaring a win. Not only are initial claims volatile around the holidays because of temporary staffing, they said, but there’s also a lot of uncertainty about how much the fallout from omicron, the new COVID-19 variant, may hurt the economy. The World Health Organization identified omicron as a variant of concern last Friday after it was detected by South Africa, and the U.S. has since restricted travel from many southern African countries.

“Claims data may continue to be noisy during the holiday period, but over time we expect initial claims will more consistently hover around pre-pandemic levels, assuming the Omicron variant of the coronavirus has only a moderate negative impact on the economy,” Nancy Vanden Houten, an economist at Oxford Economics, wrote in a commentary.

Correction - Dec. 2, 2021: This article has been corrected after it misstated the source of the unemployment claims data. The data was released by the Department of Labor.

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Article Sources

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  2. Federal Reserve Economic Data. “Initial Claims.”

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