Jobless Claims: Omicron Still Rules The Roost, But Effects Abating

It is clear that Omicron has continued to result in increased layoffs, but the effect is probably abating.
New claims declined 23,000 last week to 238,000 - still well above its pandemic low of 188,000 sets early in December, but also a big retreat from 290,000 two weeks ago. The 4 week average of new claims increased 7,750 to 255,000:

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Continuing claims for jobless benefits declined by 44,000 from 1,672,000 to 1,628,000, an increase of 73,000 from its 50 year low of 1,555,000 three weeks ago:

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As I have written for several weeks, the effects of Omicron are going to continue for at least a few more weeks. At this point, it’s pretty clear that Omicron has had a significant impact, and may even result in a negative jobs number for January in tomorrow’s nonfarm payrolls report. 

But with cases nationwide down by over 50% from the peak as of today, I still suspect Omicron will be mainly behind us by the end of February. So I still do not see a big reason to overreact to the recent increase in claims. After all, in comparison with the past few decades or even the past 5 years, 238,000 is a darn good number.