23 December 2021

It's Jobless Thursday!

Initial unemployment claims held steady at 205,000 last week, low even by the standards of the before times.

While the numbers are good, I am concerned about another economic metric, that consumer spending fell year over year last week as well, probaby due to the explosion of the Omicron variant of the Coronavirus:

Worker filings for unemployment benefits hovered at the lowest level in more than half a century last week as a strong labor market kept layoffs low, despite rising concerns about the rapid spread of the Omicron variant.

Initial jobless claims, a proxy for layoffs, were unchanged at 205,000 in the week ended Dec. 18, the Labor Department said Thursday.


Economists warn, however, that the spread of the Omicron variant of Covid-19 in the U.S. could push layoffs higher in the weeks ahead, particularly in the services sector, as consumers adjust travel and entertainment plans to reduce the risk of getting sick.

And as to consumer spending, it's down 15% YoY, and last December was not great to begin with.

This is not surprising, as Omicron is going through parts of the United States like sh%$ through a goose:

Signs are mounting that the U.S. economy is losing some steam as the Omicron variant of the Covid-19 virus spreads rapidly through parts of the country.

The number of diners seated at restaurants nationwide was down 15% in the week ended Dec. 22 from the same period in 2019, a steeper decline than in late November, data from reservations site OpenTable show. U.S. hotel occupancy was at 53.8% for the week ended Dec. 18, slightly below the previous week’s level, according to STR, a global hospitality data and analytics company.


Consumers boosted their spending by 0.6% last month, a slowdown from 1.4% growth in October, the Commerce Department reported Thursday. Economists attributed part of the November slowdown to consumers shifting their holiday purchases a month earlier, amid warnings of potential shortages due to supply-chain problems.

For now, economists expect the highly contagious Omicron variant to cause a short-term soft patch for spending and broader economic growth as some people stay home.

Many economists have lowered their growth projections for early 2022 due to growing concerns about the latest surge in coronavirus cases. The forecasting-firm Oxford Economics now expects U.S. gross domestic product to grow at a 2.5% annual rate in the first quarter, down from a previous estimate of 3.4% growth.

I have no clue as to where this is all going.


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