The number of Americans filing for unemployment benefits declined last week, the latest sign that business demand for workers remains elevated amid an ongoing labor shortage.
Figures released Thursday by the Labor Department show that applications for the week ended Jan. 29 fell to 238,000 from a revised 261,000 a week earlier, beating the 245,000 forecast by Refinitiv analysts.
Continuing claims, or the number of Americans who are consecutively receiving unemployment aid, fell to 1.628 million, a decrease of 44,000 from the previous week.
The report shows that roughly 2 million Americans were collecting jobless benefits for the week ending Jan. 15, a modest increase from the previous week; by comparison, just a little over one year ago, an estimated 18.5 million Americans were receiving benefits.
The latest jobless figures come as a recent surge in COVID-19 cases driven by the highly contagious omicron variant begins to ease. But experts warn the unprecedented rise in cases will have a glaring impact on the more closely watched January jobs report, out Friday morning. The report is expected to show that the economy added just 150,000 jobs last month, although the White House is publicly bracing for an even uglier – and possibly negative – number.
"The omicron bump in unemployment claims is dropping, and we should see levels revert to the pre-pandemic average this month," said Robert Frick, corporate economist at Navy Federal Credit Union. "But the country was at peak omicron when surveys were taken for January jobs numbers, so we can expect weak employment figures in tomorrow’s release, and possibly a net loss in jobs. Hiring should rebound quickly though, if previous pandemic waves are any guide."
Claims have continually declined as the economy recovers from the pandemic and Americans venture out to travel, shop and eat. Businesses have struggled to keep up with the demand, however, and have reported difficulties in onboarding new employees. Thursday's report suggests that companies are making an effort to retain the workers they already have.
The Labor Department reported earlier this week that there were 10.9 million open jobs at the end of December. The number of available jobs has topped 10 million for seven consecutive months; before the pandemic began in February 2020, the highest on record was 7.7 million.
An estimated 4.3 million Americans, or about 2.9% of the workforce, quit their jobs in December. That's down from a fresh high of 4.5 million in November, but well above the pre-pandemic level of about 3.6 million.
"The struggle continues for employers," said Mark Hamrick, senior economic analyst at Bankrate. "The Labor Department counted 10.9 million job openings at the end of December, not far from the recent record."