White House warns that January’s omicron spike could weigh on next

The White House on Friday warned that the omicron-fueled spike in Covid-19 cases in early January could skew the data in next week’s jobs report, as millions of Americans left work due to illness or to care for family members.

Brian Deese, President Joe Biden’s top economic advisor, told CNBC on Friday that the way the Labor Department collects employment data may have a pronounced effect on the January 2022 data and could show a greater number of unemployed people.

“The way that the government samples the data is to take a snapshot in an individual week,” Deese, the director of the National Economic Council, said an interview on “Closing Bell.”

“And if somebody is out sick for that week — even if they have not been laid off, if they weren’t paid getting paid sick leave — they will not be counted as employed,” he added. Americans “need to be prepared for January employment data that could look a little strange.”

Deese’s comments underscored the uncertainty about this month’s employment picture. Economists polled by Dow Jones are expecting a gain of about 200,000 jobs for January, although some analysts on Wall Street are expecting a loss.

The White House does not get access to sensitive economic data, including the monthly jobs report, until the day before it’s released. The data is provided to the Council of Economic Advisers, which often shares it with the president.

But Deese and the staff at the NEC are likely doing analysis of their own ahead of the Labor Department’s release. If the Bureau of Labor Statistics happened to survey Americans on their employment status during the peak days of the omicron variant infections, historical data suggests that January’s net change in payrolls could fall short of expectations or even decline.

“If you think about omicron in early January, and the impact it was having in terms of the number of people who were out sick, we do expect there to be some real variation in the data,” Deese said.

Data already available to the public may suggest a tough month for the jobs report.

The results of the U.S. Census Bureau Household Pulse Survey that was published last week showed that more than 14 million Americans did not work at some point between Dec. 29 and Jan. 10 because they had Covid, or were caring for someone with the virus, or for a child who did not go to school or daycare.

“This is double the number not working due to COVID illness in the Census survey done in early December, and on par with the peak number in the worst of the pandemic this time last year,” Mark Zandi, chief economist at Moody’s Analytics, wrote in a social media post dated Jan. 21.

“With so many workers out, odds are high that the BLS will report employment declined in January. The BLS survey period used to estimate jobs for the month overlaps with the Census survey,” he added.

Those…