Unemployment claims fell for a second week and the surge in COVID-19 cases pushed a measure of growth in nonmanufacturing industries to its lowest point in almost a year, reports showed Thursday.
Here’s a quick look at the most significant economic indicators of the day and what they tell us.
Initial Jobless Claims
- The number of people initiating claims for unemployment insurance fell for the second week, suggesting the uptick in job losses caused by the omicron surge in COVID-19 cases is subsiding. There were 238,000 first-time claims last week, down from 261,000 the previous week and a recent peak of 290,000, data from the Department of Labor showed.
- Claims finally returned to pre-pandemic levels late last year, but rose in January as omicron triggered layoffs, economists said. The two weeks of improvement is “encouraging and suggests Omicron’s grip on the job market loosened,” said Ryan Sweet, an economist at Moody’s Analytics.
Institute for Supply Management’s Report on Services Sector
- A measure of growth in nonmanufacturing industries fell to its lowest point in almost a year in January, a sign the surge in COVID-19 cases hurt the services sector by lowering staffing levels, among other things. While the Institute for Supply Management index—based on a survey of supply executives in the services sector—remained above the threshold indicating growth in the sector, the dip shows that the spread of the omicron variant temporarily closed some consumer-facing small businesses, economists said.
- Economists don’t expect the virus to derail the sector for too long. “There is plenty of pent-up demand, especially for leisure and hospitality services, which will fuel a robust revival as the worst of Omicron passes,” Oren Klachkin, lead U.S. economist at Oxford Economics, wrote in a commentary.
U.S. factory orders fell for the first time in eight months, dipping 0.4% in December after two months of increases over 1%, the Census Bureau reported. Fewer orders for transportation equipment drove the decline.
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