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Last week, the number of Americans filing jobless claims jumped to its highest level in 3 months. It was a clear sign the ongoing wave in Covid-19 infections driven by the Omicron variant is hitting the job market. On Thursday, the US Labor Department reported that more than 286 thousand people applied for first-time unemployment benefits in the week ended January 15. It was an increase of 55 thousand from the previous week. That’s the highest number of claims since mid-October. Economists attributed the jump in part to the rise in coronavirus cases. The lead US economist with Oxford Economics, Nancy Vanden Houten issued a report.

Houten said, “The rise in claims reflects both an increase in layoffs due to the surge in Covid-19 cases as well as an added boost from large seasonal adjustment factors”. The latest Covid-19 surge has weighed on the strong comeback from the coronavirus recession of 2020. Jobless claims, a proxy for layoffs, had fallen steadily for about a year, in late 2021-year dipping below the pre-pandemic average of around 220,000 a week. The Census Bureau reported that at least 9 million people said in the first week of January that they were not working because they had Covid-19 or were caring for someone who had tested positive.

The report marks triple the number from mid-December. However, the overall job market remains tight as illness and care work keep workers out of the labor force and put pressure on businesses. It is noteworthy that employers posted 10.6 million job openings in the month of November. It marked the fifth-highest monthly total in records going back to 2000. Moreover, a record 4.5 million workers quit their jobs in the month of November. These numbers clearly indicated that they are confident enough to look something better.