The Labor Department reported Thursday that initial claims for unemployment insurance rose more than expected at a time when the omicron variant spread through the U.S.
There were 207,000 jobless claims for the week ended January 1st, up 7,000 from the previous week.
The latest data shows that claims areanchored around a level that is even lower than before the Covid-19 pandemic, when claims were averaging around 215,000. The four-week moving average went up to 204,500 for the current period.
Continuing claims which run a week behind the headline number rose, climbing to 1.75 million for an increase of 36,000.
Unadjusted data shows that weekly claims rose in New York, Pennsylvania and Connecticut.
The U.S. trade deficit for goods and services increased to $80.2 billion in November, an increase from October's $67.2 billion but below the estimate of $81.5 billion. The trade shortfall was close to September's record of $81.4 billion as the deficit increased with China, the European Union and Canada.
The jobs market is the main focus this week as investors await the nonfarm payrolls report from the Labor Department. December is expected to see a gain of 422,000.
Thursday's claims report won't be included in the tally, likely showing up more when January's numbers are compiled.
Ian Shepherdson, chief economist at Pantheon Macroeconomics wrote that the decline in claims in October and early November could not be sustained. The labor market is extremely tight and firms won't let staff go unless they have no other choice. It is possible that an extended Omicron wave would change that, but the initial impact is likely to make firms even more keen to keep people.
The number of people receiving benefits across the program fell by nearly 200,000.
The unemployment rate has dropped to 4.2% from 14.8%, but the labor market still has a ways to go before it reaches pre-covid levels.
The labor force participation rate is 1.5 percentage points lower than it was in February 2020 and the total employment is 3.6 million below where it was in February 2020. According to meeting minutes, some Federal Reserve officials said at their December meeting that the economy is close to full employment.
This is breaking news. You can check back here for more updates.
