It's Jobless Thursday!

Initial unemployment claims fell slightly, while 4th quarter GDP rose strongly.

It should be noted that while November was gangbusters, December was not:

Filings for unemployment benefits fell last week, showing a tight labor market with low layoffs and plentiful job openings even in the face of disruptions caused by the Omicron variant of Covid-19.

Initial jobless claims, a proxy for layoffs, fell to 260,000 for the week ended Jan. 22, a decrease of 30,000 from the revised level the week before, the Labor Department said Thursday. A gauge of those on jobless rolls fell to the lowest level since 1973.

“Employers are still doing a lot to try to keep workers on staff because they know it’s hard to hire right now,” said Aaron Sojourner, an economist at the University of Minnesota. He described employees unexpectedly missing work because of Covid-19 as the biggest consequence of the surge in cases.

After declining through most of 2021, the number of new claims reached the lowest point in five decades by December. More recently, claims had moved higher as the Omicron variant began to ratchet up the number of Covid-19 cases throughout the country, causing some workers to call in sick, businesses to temporarily shut down and schools to pivot to online learning.

I think that it is safe to say that Omicron is having an effect.

As to GDP:

The U.S. economy grew rapidly in the fourth quarter of last year, advancing to a 6.9% annual rate, capping the strongest year of growth in nearly four decades as the country rebounded quickly from the pandemic-induced recession.

But growth recently has run into obstacles that could lead to more modest growth this year, economists say.

Gross domestic product, the broadest measure of goods and services, in the fourth quarter accelerated from the third quarter’s growth of 2.3%, adjusted for inflation, the Commerce Department said Thursday. The gain reflected solid spending by households, much of it occurring early in the quarter, and companies pushed to rebuild depleted inventories as they try to overcome persistent supply shortages.

Output grew 5.5% in all of 2021, when comparing the fourth quarter to the same period a year earlier. The economy hasn’t grown that fast since 1984, during President Ronald Reagan’s first term, when the country was rebounding from a double-dip recession and an era of high inflation.

………

Americans reined in shopping toward the end of the quarter, according to other Commerce Department data on retail sales, as the Omicron variant of Covid-19 triggered a new wave of infections and higher prices cut into their paychecks. A separate Commerce Department report Thursday showed sales of durable goods—long-lasting items such as cars, refrigerators and bulldozers—fell in December.  

January employment and GDP numbers should be interesting.