Jobless claims rose last week but remained historically low, indicating the labor market is on strong footing as Covid-19 cases of the Omicron variant decline.

       Initial jobless claims, a proxy for layoffs, increased to a seasonally adjusted 248,000 last week from 225,000 a week earlier, the Labor Department said Thursday. The four-week moving average, which smooths volatility, fell slightly to 243,250.

       New filings for unemployment benefits have largely stayed below 250,000 a week since mid-November.

       Continuing claims, a proxy for the total number of people receiving unemployment benefits through regular state programs, declined to 1.59 million for the week ended Feb. 5 from 1.62 million a week earlier. Continuing claims are reported with a one-week lag.

       Millions of workers called in sick and businesses temporarily shut down last month because of Omicron outbreaks. Jobless claims spiked in mid-January but have since declined along with an easing pandemic.

       Economists expect claims to drift further downward as employers cling to workers in a tight labor market.

       “Overall, we expect the labor market will remain on a robust trajectory this year," said Lydia Boussour, lead U.S. economist at Oxford Economics, in a note.

       The labor market and broader economy largely powered through the surge in Omicron cases. U.S. employers hired at a robust pace in January, adding 467,000 jobs. Wages rose in January from the year prior by 5.7%, well above the average of about 3% before the pandemic.

       Retail sales, a measure of spending at stores, online and restaurants, rose solidly in January as consumers snatched up vehicles, furniture and building materials.

       Still, consumer inflation, which climbed at its fastest pace in nearly 40 years last month, is eroding consumers’ spending power because wages are rising more slowly than the price of most goods and services.

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       Federal Reserve officials at their meeting last month discussed an accelerated timetable for raising interest rates, beginning with an anticipated increase in March amid greater discomfort with high inflation.

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