US JOBLESS CLAIMS SHOW NO SIGN OF RISING EVEN AS OMICRON SPREADS

Applications for state unemployment benefits in the United States were unchanged last week, signalling that the labour market continues to recover even as the Omicron variant of the coronavirus spreads across the country.

Initial jobless claims – a proxy for layoffs – were little changed at a seasonally adjusted rate of 205,000 for the week ended December 18,  the US Labor Department said on Thursday.

The four-week average of jobless claims, which smooths out week-to-week ups and downs, rose to just above 206,000.

Continuing claims for jobless benefits dropped to 1.9 million in the week ended December 11.

Earlier this month, jobless claims dropped to a level last seen in 1969.

A host of data is signalling that the US economy is set to finish a bumpy 2021 on a strong note.

Revised figures released this week showed the US economy grew at a slightly faster 2.3 percent clip in the three months ending September, when the Delta variant was spreading rapidly through the nation, weighing on the recovery.

And most economists expect growth to bounce back in the fourth quarter, though some have revised their projections slightly downward thanks to Omicron and the continued deadlock in Washington over President Joe Biden’s $1.75 trillion domestic investment bill.

Goldman Sachs downgraded its growth outlook for the US for the first quarter of 2022 from 3 percent to 2 percent.

Shaky ground

The American economic recovery from the pandemic-induced recession is facing headwinds – from Omicron to stalled stimulus plans and inflation measures running at their hottest levels in nearly 40 years.

The jobs market finds itself in a unique position. Businesses slashed more than 22 million jobs in March and April 2020 at the onset of the coronavirus pandemic. The US unemployment rate soared to 14.8 percent.

But as the US doled out vaccines and lifted restrictions, millions came out of pandemic-hibernation and businesses across the country faced a new problem: an acute shortage of workers.

Workers are so confident about their job prospects that some 4.2 million Americans quit their jobs in October and 4.4 million quit in September. Little wonder economists have dubbed this phenomenon The Great Resignation.

So what was a crisis of layoffs is now a crisis of shortage of workers. Many of those who were either let go or walked off the job could be staying on the sidelines for a host of reasons: fear of contracting COVID, a lack of childcare options, trying their hand at opening their own business, or deciding to take early retirement thanks to swelling home and stock prices.

There were a near-record 11 million job openings at the end of October. The current unemployment rate is at a 21-month low of 4.2 percent – closing in fast on the pre-pandemic level of 3.5 percent.