Nearly 9 million people called out sick with COVID-19 in the early part of January, a staggering number and a blow to businesses already grappling with a labor shortage.
The Census Bureau’s Household Pulse Survey released Wednesday showed 8.8 million people reported not being at work because of coronavirus-related reasons between December 29 and January 10.
That was well up from the 3 million who called out sick from December 1 to December 13, before the Omicron wave struck. It wasn’t clear from the survey how many of the workers were ill with symptoms, or isolating due to close contacts or positive tests.
Meanwhile, layoffs increased last week as Omicron battered businesses and delayed economic recovery, with new jobless claims increasing 55,000 to 286,000, the highest level since mid-July.
Layoffs increased last week as Omicron battered businesses and delayed economic recovery, with new jobless claims increasing 55,000 to 286,000
People walk past a closed business shop in Miami, Florida on January 12, 2022
‘The Omicron variant of COVID-19 is hurting the U.S. labor market, but the good news is that this will be temporary,’ said Ryan Sweet, a senior economist at Moody’s Analytics in West Chester, Pennsylvania.
The third straight weekly increase in jobless claims reported by the Labor Department on Thursday was also influenced by unfavorable seasonal factors after the holidays.
Coronavirus cases, driven by the Omicron variant, are beginning to level off and the seasonal factors are seen normalizing soon, suggesting the recent surge in applications is a blip.
The US recorded an average of 739,234 new COVID cases each day over the past week, according to a DailyMail.com analysis.
The high level of cases is walloping the US workforce, forcing employers to scramble as staffers call in sick at record levels.
In New Mexico, National Guard troops and state bureaucrats are filling in for at least 800 teachers and childcare workers out sick in a bid to keep schools and daycares open.
Governor Michelle Lujan Grisham (pictured) announced her plan to ask National Guard members and state employees to volunteer as substitute teachers
A Brandon Motor Lodge displays a ‘Help Wanted’ sign in Brandon, Florida in June
On Wednesday, New Mexico Governor Michelle Lujan Grisham announced her plan to ask National Guard members and state employees to volunteer to become licensed substitute teachers or child care workers amid the surge in infections.
The governor said state workers are encouraged to participate in a spirit of public service and that no one is being drafted.
State employees and Guard members who participate will get their usual pay and be considered on administrative leave or active duty, respectively.
Lujan Grisham said the state is hoping to deploy 500 new substitute teachers and day care workers as soon as possible.
The pandemic has exacerbated teacher shortages in U.S. states including New Mexico and neighboring Oklahoma, which on Tuesday appealed to state employees to work as classroom substitutes.
Other states are also scrambling to keep schools open, with California streamlining its substitute teacher hiring process and Kansas opening up substitute positions to people with no college education.
The Census Bureau’s Small Business Pulse Survey released on Thursday also showed an increase in establishments reporting large negative impacts from the pandemic.
The sign at an automobile oil-change shop reads ‘Sos Help Wanted’ in Brockton, Massachusetts on January 4
It was led by accommodation and food services businesses, with big rises also in education as well as arts entertainment and recreation.
The labor market setback is unlikely to stop the Federal Reserve from raising interest rates in March to tackle high inflation.
Claims have plunged from a record high of 6.149 million in early April 2020.
Employers are desperate for workers, with 10.6 million job openings at the end of November.
The unemployment rate is at a 22-month low of 3.9 percent, a sign the labor market is at or close to maximum employment.
‘The underlying strength in the labor market suggests this is a temporary blip due to Omicron,’ said John Lynch, chief investment officer at Comerica Wealth Management in Charlotte, North Carolina. ‘We look for job growth to continue to firm as global cyclical recovery persists.’
But some economists worried that the jump in claims, which followed a plunge in retail sales in December as well as manufacturing production, could be signaling a faster slowdown in economic activity than currently anticipated.
‘The higher layoffs are a cautionary tale for the economy where despite inflation pressures, the Fed will have to proceed with their interest rate hikes at a measured pace,’ said Christopher Rupkey, chief economist at FWDBONDS in New York. ‘The economy may be slowing down more than previously believed.’
A hiring sign is in front of a Target store in Manchester, Connecticut in November
Manufacturing, however, appears to be picking up, though shortages and higher prices remain a headache.
The Philadelphia Fed said on Thursday its business activity index rose to a reading of 23.2 in January from 15.4 in December.
Any reading above zero indicates expansion in the region’s manufacturing sector, which covers eastern Pennsylvania, southern New Jersey and Delaware.
News on the housing market was discouraging. A fourth report from the National Association of Realtors showed existing home sales dropped 4.6 percent to a seasonally adjusted annual rate of 6.18 million units in December as higher prices amid record low inventory continued to shut out some first-time buyers.
Economists expect demand for housing to remain strong even as mortgage rates increase.
‘Unless job and income growth slow sharply, owner-occupied housing demand is likely to remain solid, keeping upward pressure on house prices,’ said David Berson, chief economist at Nationwide in Columbus, Ohio.