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US jobless claims fell by more than forecast last week to 223,000

A "Now Hiring" sign is placed on the glass storefront of a store in Montebello, Calif., on Dec. 9 amid a nationwide labor shortage.FREDERIC J. BROWN/AFP via Getty Images

Applications for U.S. state unemployment insurance fell for a third week as Covid-19 cases continue to drop, solidifying the labor market’s strength after an omicron-induced spike in claims.

Initial unemployment claims decreased by 16,000 to 223,000 in the week ended Feb. 5, Labor Department data showed Thursday. The median estimate called for 230,000 applications in a Bloomberg survey of economists.

Continuing claims for state benefits dropped to 1.62 million in the week ended Jan. 29.

Claims have been falling for the past few weeks as the labor market gets back on track from the spread of the omicron variant, which led to a surge in unemployment applications over the new year. More broadly, claims are trending toward pre-pandemic levels as companies struggle to retain and attract talent amid ongoing labor shortages, keeping layoffs at a record low.