Just when you think you have a solid read of the job market — “hot” being the operative word — this economy changes up all of a sudden.
It’s Thursday, and you know what that means: We’re talking about first-time claims for unemployment, which are primarily filed by people getting laid off. Last week, that number spiked up by 55,000 to 286,000 according to the Department of Labor. That is higher than it’s been in months and omicron is partly to blame.
We called up one of our regular unemployment experts, Andrew Stettner of the Century Foundation, who was having a morning typical of a pandemic January.
Stettner was at home watching his kids because their school called a snow day. “It’s ridiculous, it’s just raining, but they call it at night,” he said. The timing wasn’t great. “We have a babysitter, but she actually has COVID so she has to take, you know, 10 days off.”
The recent surge in omicron cases is keeping people out of work, and then there are the seasonal effects of winter.
“Layoffs in industries like construction in Pennsylvania and Wisconsin, layoffs in automotive in Missouri and Michigan,” Stettner said, adding that the current level of jobless claims was still consistent with a growing, recovering economy.
But there are some worrying signs, according to Mark Hamrick, a senior economic analyst at Bankrate.
“Consumers are pulling back on some spending or cannot do certain things. Think about the interruption in Broadway performances. And then there are the situations also where enterprises are entering — here it is, year number three of the pandemic — and essentially throwing in the towel,” Hamrick said.
As omicron has surged, people’s confidence in their economic situation has deteriorated, said John Leer, chief economist for polling firm Morning Consult.
“So we’ve had this fairly pronounced increase in job insecurity, in the share of adults indicating they lost pay or income at any point during the prior week,” he said.
Leer suspects the actual level of job loss right now is even higher than today’s jobless claims report indicates because a lot of workers have run out of benefits.