Jobless claims jump to 286,000, the highest level since October

Jobless claims went up last week in a possible sign that the winter surge was hitting the employment picture.

Initial filings for the week ended January 15 totaled 286,000, well above the estimate of 225,000 and a substantial gain from the previous week.

The total was the highest since the week of October 16, 2021.

The managing director of investment strategy at E*Trade said that Omicron has put a wrench in where we stand on the labor market front, but with hiring challenges, employers are likely trying to hold onto their workforce. This could be a short-term surge in claims.

Continuing claims, which run a week behind the headline data, rose 84,000 to 1.64 million. The four-week moving average for continuing claims, which irons out weekly volatility, declined by 55,250 to 1.664 million, the lowest since the week ended April 27, 2019.

Unadjusted data shows that California had a 6,125 jump in claims while New York had a 14,012 drop.

The total number of recipients of unemployment compensation programs increased by 180,114.

Jobless claims are seen as a leading real-time gauge of the employment picture, which has brightened in some respects but is still beset by multiple trouble spots.

The unemployment rate has fallen after a record year of employment growth. The employment level is still below where it was in February 2020, just before the declaration of the swine flu.

The labor force participation rate is 1.5 percentage points below pre-pandemic levels. The labor force decreased by 2.3 million.

The manufacturing activity in the Philadelphia area expanded more quickly than expected.

The percentage point difference between companies reporting expansion and contraction was registered in the Philadelphia Federal Reserve's outlook survey. The estimate was for 18. Only 16% of the companies said they expected decreases in activity, with gains coming in new orders and future shipments.

Expectations of employment growth are reflected in the employment index, which fell 19 points to 38.4%.

Inflation is an issue. The future prices paid index went up 23 points to 76.4, its highest level in over twenty years.