Jobless Claims Drop Below Expectations

The number of Americans who filed new unemployment claims decreased to 238,000 in the week ending Jan. 29, the Labor Department announced Thursday.

The Labor Department figure showed a 23,000 claim decrease compared to the week ending. Jan. 22, when claims increased to 260,000. Economists surveyed by The Wall Street Journal estimated that new jobless claims would drop to 245,000.

The continuing decrease in jobless claims is a sign that the labor market is recovering while the demand for labor remains strong, the WSJ reported.

Meanwhile, private firms’ payroll saw a massive decrease in jobs, dipping by 301,000 in January as the Omicron coronavirus variant slowed down the recovering labor market, according to the ADP National Employment Report released Wednesday. January’s figure marked a significant decrease from the 776,000 private jobs added in December 2021.

“If we see initial claims fall, that would be an indication that the hit to the economy and the labor market in particular from the Omicron wave is fading,” Gus Faucher, chief economist at the PNC Financial Services Group, told the WSJ, adding that he anticipates claims to continue to decrease over the next two months.

“The demand for labor is still very strong,” Faucher said.

The U.S. Bureau of Labor Statistics is scheduled to release January’s jobs report on Feb 4. Economists surveyed by the WSJ predict the U.S. economy added 150,000 jobs in January, a decrease from December’s 199,000 figure.