US jobless claims reach highest level in 3 months

WASHINGTON — 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 consecutive week — by 55,000 to 286,000, highest since mid-October, the Labor Department 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, highest since late November.

Economists said that last week’s unemployment 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 U.S. economy if claims stay above 250,000 as the Fed’s March policy meeting approaches, Contingent analysts said.

While the fast-moving omicron variant may cause less severe disease on average, COVID-19 deaths in the country are climbing, and modelers forecast 50,000 to 300,000 more Americans could die by the time the latest coronavirus wave subsides in mid-March.

The seven-day rolling average for daily new COVID-19 deaths in the country has been trending upward since mid-November, reaching nearly 1,800 on Jan. 19 — still below the peak of 3,300 in January 2021.