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US weekly jobless claims rose last week on soaring Omicron cases

The US weekly jobless claims increased by 23,000 from previous figure to a seasonally adjusted 230,000 for the week ended Jan 8, beating forecast for 200,000 applications.

Strong rise in new Covid-19 infections is mainly to be blamed for unexpected rise in the number of Americans filing new claims for unemployment benefits in the first week of January, however the number of initial claims for state unemployment benefits remained at a level consistent with rapidly tightening labor market conditions.

Jobless claims have declined from a record high of 6.1 million, hit in early April 2020, when pandemic hit the America, but remain below their pre-pandemic level, that signals strengthening labor market conditions.

New applications for unemployment benefits remain very low despite the latest surge in new infections by the Omicron variant of coronavirus

The fresh Covid-19 wave has disrupted activity in most of the sectors as workers call in sick, although employers are hanging on to their workers, with 10.6 million new job openings reported at the end of November.

The government’s labor report, released last Friday, showed the unemployment rate fell to a 22-month low of 3.9% in December, an indication that the labor market is at or close to maximum employment.

The US workforce is about 2.2 million people smaller than before the pandemic