Applications for U.S. state unemployment insurance surged last week to a three-month high, suggesting that the Omicron variant is having a bigger impact on the labor market.

Initial unemployment claims increased by 55,000 to 286,000 in the week ended Jan. 15, Labor Department data showed Thursday. The figure exceeded all estimates in a Bloomberg survey of economists. The report reflects the reference week for January employment data due early next month.

Continuing claims for state benefits rose to 1.64 million in the week ended Jan. 8.

The increase in applications may point to employers laying off staff during the most recent surge in COVID cases. Even so, the fallout should be short-lived as companies are desperate to retain and attract talent amid ongoing labor shortages.

Claims figures have been choppy in the last few weeks, reflecting challenges adjusting for seasonal effects during the holiday period. The increase in claims last week was the largest in six months.

In fact, claims fell 83,418 to 337,417 last week on an unadjusted basis. New York, Missouri and Texas were states with the biggest decreases in unadjusted claims. California registered the largest increase in applications.

--With assistance from Kristy Scheuble.