U.S. jobless claims rise to highest since October

The number of Americans applying for unemployment benefits rose to the highest level in three months as the fast-spreading omicron variant continued to disrupt the job market.

Jobless claims rose for the third straight week — by 55,000 to 286,000, highest since mid-October, the U.S. Department of Labor reported Thursday.

The jump in claims marked the biggest one-week increase since mid-July.

The four-week average of claims, which smooths out weekly volatility, rose by 20,000 — to 231,000 — the highest since late November.

Economists said last week's claims may have been inflated by the Labor Department's attempts to tweak the numbers to account for seasonal variations. Unadjusted, applications fell last week by more than 83,000.

“We could see one more week of notably higher claims before they should top out,'' analysts with Contingent Macro Advisors predicted. “This bears close watching going forward.''

The Federal Reserve might reconsider plans to ease its massive support for the economy if claims stay above 250,000 as the Fed's March policy meeting approaches, Contingent said.

A surge in COVID-19 cases has set back what had been a strong comeback from last year’s short but devastating coronavirus recession.

Jobless claims — a proxy for layoffs — had fallen mostly steadily for about a year and late last year dipped below the pre-pandemic average of around 220,000 a week.

Altogether, 1.6 million people nationwide were collecting jobless aid the week that ended Jan. 8.

In Iowa, continued claims for the week ended Jan. 15 rose only slightly, to 24,963 from 24,541 for the previous week.

The state’s first-time applications declined, to 3,260 from 4,985, according to the Iowa Workforce Development’s website.

In Linn County, initial claims stood at 292, down from 476 the week before.

For Johnson County, first-time claims were recorded at 117 -- also down, from 160 the week ended Jan. 8.

The Gazette contributed Iowa numbers to this article.