The number of Americans who filed new unemployment claims decreased to 260,000 in the week ending Jan. 22 as the tight labor market continues to show signs of strength despite surging cases of the Omicron coronavirus variant.

The Labor Department figure shows a 30,000 claim decrease compared to the week ending Jan. 15 when claims increased to 286,000. Economists surveyed by The Wall Street Journal estimated that new jobless claims would fall by just 21,000 to 265,000.

Claims reached their lowest level in 50 years in December and have recently moved higher as the Omicron variant continues to spread throughout the country, causing workers to call in sick and businesses to temporarily shut down, the WSJ reported.

“Employers are still doing a lot to try to keep workers on staff because they know it’s hard to hire right now,” Aaron Sojourner, an economist at the University of Minnesota, told the WSJ. Employees missing work due to COVID-19 infection is the greatest consequence of soaring cases, and it will likely slow the labor markets recovery, Sojourner said.

The recent spike in claims results from workers filing for unemployment benefits after positive COVID-19 test results, David Mericle, chief U.S. economist at Goldman Sachs’ Global Investment Research, told the WSJ. He explained that workers are eligible to apply for unemployment benefits if they are on unpaid sick leave even if they don’t leave their job.

“With labor demand so strong, I’m doubtful that many of these people are really losing their jobs,” Mericle said. “And even if they are … they presumably are able to find new ones pretty easily.”

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