Employment in the United States resists the wave of infections with Omicron.

source: thehill.com

Employment in the United States resists the wave of infections with Omicron.

Although the effect of the new variant may slow down the economy, requests for subsidies due to lack of work have not grown this week, an indicator that reflects the strong recovery of the labor market.

The number of Americans who applied for unemployment benefits did not change much last week compared to the previous one, remaining at a historically low level that reflects the strong recovery of the labor market after last year's recession due to the coronavirus pandemic.

Applications for unemployment benefits stood at 205,000. The four-week average, which smoothed out the weekly ups and downs, rose to over 206,000. The figures suggest that the spread of the Omicron variant did not immediately trigger a wave of layoffs.

In total, 1.9 million Americans collected traditional unemployment assistance in the week ending December 11.

Weekly filing numbers, an indicator of layoffs, have been steadily declining for most of the year. Employers are reluctant to lay off workers when replacement is so challenging to find. In October, the United States posted a near-record 11 million job openings, and 4.2 million Americans left their jobs - just shy of the September record of 4.4 million - because there are so many opportunities.

The job market has recovered from last year's brief but intense coronavirus recession. Due to the pandemic, governments ordered closures, consumers took refuge at home, and many companies closed or reduced their hours. As a result, employers cut more than 22 million jobs in March and April 2020, and the unemployment rate soared to 14.8%.

But massive public spending - and eventually the launch of vaccines - got the economy back. Employers have added 18.5 million jobs since April 2020, leaving the United States still with 3.9 million fewer jobs than it had before the pandemic. Nevertheless, the unemployment rate has fallen to 4.2%, close to what economists consider full employment.

Consumer spending grew at a slower pace in November

In November, consumer spending grew more slowly, increasing risks of a broader economic slowdown amid the latest wave of COVID-19 cases.

US consumer spending rose 0.6% last month, after increasing 1.4% in October, the Commerce Department reported Thursday. According to economists, people bought Christmas gifts earlier than usual this year in anticipation of product shortages, which helped boost spending in October and contributed to the slowdown in sales in November.

Low unemployment, significant savings, and rapidly rising wages give Americans money to spend. According to the Conference Board, a private research group cited by The Wall Street Journal, consumers were more optimistic about the economy in early December, heading into the final weeks of the holiday season.

"We remained on the path of extreme consumption in the fourth quarter, but now I see that momentum continuing to lose steam," Aneta Markowska, chief economist at Jefferies LLC, told The Wall Street Journal.

Markowska and other economists expect the Omicron variant of the coronavirus to be a temporary drag on economic growth. Some experts are lowering their growth forecasts for early 2022 due to concerns about increasing cases. Forecasting firm Oxford Economics estimates that US gross domestic product will grow at an annual rate of 2.5% in the first quarter, up from a previous estimate of 3.4%.