First-time claims for unemployment compensation in the United States rose sharply last week, reaching their highest level since October 2021, suggesting that some employers may be laying off workers as the omicron variant of the coronavirus increases across the country and slows business operations.
The U.S. Department of Labor reported Thursday that 286,000 unemployed workers applied for benefits, some 55,000 more than the previous weeksurpassing the 256,000 figure recorded in mid-March 2020, when the coronavirus first arrived in the U.S. and companies began laying off hundreds of thousands of workers.
In recent weeks, the U.S. recorded 750,000 or more new cases of coronavirus every day, largely due to the highly transmissible omicron variant. In some cases, that has wreaked havoc in sectors of the world’s largest economy.
For the most part, employers have been retaining their workers and looking for more as the United States continues its rapid economic recovery from the coronavirus pandemic. The nation’s unemployment rate fell in December to 3.9%, not far above the five-decade low of 3.5% recorded before the pandemic broke out.
Many employers are looking for more workers, even though about 6.9 million remain unemployed nationwide.
At the end of November, there were 10.4 million job openings in the U.S., but the skills of available workers often do not match what employers want, or the job openings are not located where the unemployed live. In addition, many of the available jobs are low-wage service positions that the unemployed are avoiding.
U.S. employers added only 199,000 new jobs in December, lower than expected. But overall, 6.3 million jobs were created through 2021, in a much faster recovery than many economists originally forecast a year ago.
Inflation concerns.
U.S. economic progress is occurring even as President Joe Biden and lawmakers in Washington, along with consumers, express concern about the biggest increase in consumer prices in four decades.: 7% at an annualized rate in December.
The rising inflation rate has pushed policymakers at the country’s central bank, the Federal Reserve, to move more quickly to end the asset purchases they had used to boost the country’s economic recovery by March, rather than in mid-2022 as originally planned.
The agenda for the Fed’s most recent board meeting showed that policymakers are aiming for a faster pace to raise the benchmark interest rate they have held near 0% since the pandemic began.
The Fed has said it could raise the rate, which influences borrowing costs on loans extended to businesses and consumers, by 0.25 percentage points three times this year to reduce inflationary pressures.
Meanwhile, government statistics show that U.S. consumers are paying much higher prices for food, restaurant meals, gasoline, and new and used vehicles.
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