Labor Crisis: Jobless Claims Remain Near 52-Year Low

The number of Americans who filed new unemployment claims decreased to 198,000 in the week ending Dec. 25 as employers continue to fight to retain workers amid a tight labor market and growing Omicron coronavirus variant concerns.

The Labor Department figure shows an 8,000 claim decrease compared to the week ending Dec.18, when claims reached a revised level of 206,000. Economists surveyed by The Wall Street Journal projected claims remain near last week’s reported level of 205,000.

Ian Shepherdson, chief economist at Pantheon Macroeconomics, told the WSJ he thinks the Omicron variant won’t hurt economic growth as much as the Delta variant, citing new antiviral treatment and the notion that the new variant causes less severe disease.

Shepherdson sees employers adding roughly 450,000 jobs per month throughout 2022, highlighting a slight slowdown from 2021 when companies added around 550,000 jobs each month, the WSJ reported.

Other economists see Omicron being more harmful to economic recovery than previous variants.

“At the height of the Omicron transmission we could get very subdued employment that is close to stalling, led by a sharp slowing in net job gains in the service sectors such as leisure and hospitality,” Kathy Bostjancic, chief U.S. economist at Oxford Economics, told the WSJ. “This would reflect employers’ hesitancy in hiring and employees’ caution in working due to deteriorating health conditions.”

Meanwhile, the U.S. economy added just 210,000 jobs in October, well below experts’ projection of 573,000. Unemployment also fell to 4.2% in November from Octobers’s 4.6% figure.

December’s employment data is scheduled for release on Jan. 7, according to the Bureau of Labor Statistics.