Unemployment Insurance Claims Fall Again

Omicron wave loses steam; jobless claims fall again in week ending Jan. 29, 2022

Initial claims for unemployment insurance across the U.S. were 238,000 for the week ending Jan. 29, 2022, on a seasonally adjusted basis. This represented a decrease of 23,000 (8.8%) from the revised figure for the prior week. It was the second consecutive weekly decline and was 2.9% below economists' estimate of 245,000.

The four-week moving average for initial claims rose to 255,000, up by 7,750 (3.1%) from the revised figure for the prior week. In December 2021, initial claims had fallen to 188,000.

Key Takeaways

  • Initial claims for unemployment insurance in the week ending Jan. 29, 2022, declined for the second straight week.
  • They also were below economists' estimates for the second consecutive week.
  • Continuing claims also fell.
  • The impact of the omicron variant of COVID-19 seems to be diminishing rapidly.

Omicron Wave Relents

While the impact of the omicron variant of COVID-19 appears to be diminishing rapidly, nearly 9 million people lost some time at work in January 2022 due to it. Also, payroll processor Automatic Data Processing, Inc. (ADP) has reported that 301,000 jobs were lost in January, the largest decline since the first month of the pandemic in early 2020.

This suggests that the employment report due out on Feb. 4, 2022, from the U.S. Bureau of Labor Statistics (BLS) is likely to show weak hiring in January and perhaps even a decline in jobs. Nonetheless, businesses are facing a protracted labor shortage that probably will continue for the foreseeable future.

Continuing Claims Decline

Unemployment insurance continuing claims also recorded a decrease, although compilation of this data lags new claims by one week. For the week ending Jan. 22, 2022, the number of continuing claims, also called the number of insured unemployed persons, was 1,628,000, a decrease of 44,000 (2.6%) from the revised number for the prior week, on a seasonally adjusted basis.

Meanwhile, the four-week moving average for continuing claims fell by 31,250 (1.8%) from the revised figure for the prior week to 1,619,750. Given that the moving average is designed to eliminate random volatility in the weekly figures, this adds to optimism about the current state of the labor market.

Adjusted vs. Unadjusted Data

The seasonally adjusted nationwide initial claims figure of 238,000 cited above for the week ending Jan. 29, 2022, was derived from an unadjusted figure of 257,002. The unadjusted figure fell by 11,728 (4.4%) from 268,730 in the prior week. However, the normal seasonal factors observed at this time of year should have led to an increase of 11,183 (4.2%) from the prior week to 279,913 in the week ending Jan. 29, 2022, all else equal. During the comparable week in 2021, there were 849,650 initial claims.

Initial Jobless Claims by State

Most states reported declines in new claims, led by 5,093 fewer unadjusted initial claims in Ohio, 2,330 fewer in Kentucky, and 2,106 fewer in Illinois. The largest increases in unadjusted initial claims were 2,654 in Pennsylvania, 1,445 in Michigan, and 1,129 in Indiana. Note that the statistics compiled by the U.S. Department of Labor also include the District of Columbia, Puerto Rico, and the Virgin Islands, in addition to the 50 states. As indicated above, total unadjusted new claims rose by 11,728 during the week ending Jan. 29, 2022.

However, the U.S. Department of Labor cautions that the breakdown by state for the week ending Jan. 29, 2022, contains what are called advance claims. These advance claims are reported by the state liable for paying the unemployment compensation. However, data for previous weeks classify claimants by state of residence. Thus, the state-by-state figures for the week ending Jan. 29, 2022, and the prior week are not completely comparable.

For comparable figures, the Department of Labor instead looks at the data for a week earlier, which ended on Jan. 22, 2022. The only increase in initial claims for that week, compared to the week before that, was in Alabama (+628), while the largest decreases were in California (-8,078), Pennsylvania (-7,967), New York (-5,722), New Jersey (-4,818), and Kentucky (-4,049). 

Highest Insured Unemployment Rates

Meanwhile, the highest insured unemployment rates for the week ending Jan. 15, 2022, were in Alaska (3.0%), the Virgin Islands (3.0%), New Jersey (2.6%), California (2.5%), Minnesota (2.5%), New York (2.4%), Rhode Island (2.4%), Illinois (2.3%), Kentucky (2.3%), and Massachusetts (2.3%). The advance seasonally adjusted national figure for the week ending Jan. 22, 2022, was 1.2%, unchanged from the prior week. The insured unemployment rate is the ratio of persons receiving unemployment benefits to the total number of persons in the labor force.

Article Sources
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  1. U.S. Department of Labor. "News Release: Unemployment Weekly Claims, Feb. 3, 2022," Pages 1-2.

  2. MarketWatch. "U.S. Unemployment Claims Drop 23,000 to 238,000 as Omicron Wave Relents."

  3. U.S. Department of Labor. "News Release: Unemployment Weekly Claims, Feb. 3, 2022," Pages 3-5.

  4. Federal Reserve Bank of St. Louis. "Labor Market Slack and the Insured Unemployment Rate."

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