January's jobs data may be impacted by the spike in omicron cases, according to a warning from the White House.

• Next week's jobs report could be affected by the surge in Covid-19 cases in early January, according to a warning from the White House.
• The way the Labor Department gathers information could significantly influence the January 2022 jobs report, according to Brian Deese, President Joe Biden's top economic advisor.
• Over 14 million Americans were unemployed between Dec. 29 and Jan. 10 due to Covid-19 or its effects, according to a recent Census Bureau report.

The jobs report next week may be affected by the rise in Covid-19 cases due to omicron, as many Americans took time off work due to illness or to care for family members.

On Friday, CNBC reported that Brian Deese, President Biden's top economic advisor, stated that the Labor Department's method of collecting employment data may significantly impact the January 2022 data, potentially showing a higher number of unemployed individuals.

According to Deese, the National Economic Council director, the government collects data by taking a weekly snapshot.

If someone is absent from work due to illness during that week, regardless of whether they have been fired or not received payment for sick leave, they will not be considered employed. Americans should anticipate that the January employment data may appear unusual.

Some analysts on Wall Street predict a loss of jobs in January, while economists surveyed by Dow Jones anticipate a gain of approximately 200,000 jobs.

The monthly jobs report is not made available to the White House until the day before its release, and it is typically shared with the Council of Economic Advisers before being presented to the president.

The NEC staff is likely conducting their own analysis before the Labor Department releases its findings, and historical data suggests that the Bureau of Labor Statistics' survey of Americans on their employment status during the peak days of the omicron variant infections may result in January's net change in payrolls falling short of expectations or declining.

We anticipate a significant difference in the data regarding omicron's impact on the number of sick individuals in early January, according to Deese.

The jobs report may indicate a challenging month based on publicly available data.

Over 14 million Americans were unable to work between Dec. 29 and Jan. 10 due to Covid-19, caring for someone with the virus, or a child who did not attend school or daycare, according to the U.S. Census Bureau Household Pulse Survey published last week.

According to Mark Zandi, chief economist at Moody's Analytics, the number of people not working in the Census survey conducted in early December is double the peak number during the worst of the pandemic in the previous year.

The BLS survey period for estimating jobs in January overlaps with the Census survey, which means that with many workers absent, the odds of reporting employment decline are high.

Wall Street economists predict that the January data will show weaker performance compared to previous months.

Ian Shepherdson, the chief economist of Pantheon Macroeconomics, wrote on Jan. 20 that he believes the revised data, which will be released on February 4, will show private payrolls falling by approximately 300K. However, he emphasized that the margin of error in all payroll forecasts at present is significant.

The pandemic has made it harder to gather accurate employment data, and the revisions made by the Labor Department have been larger than usual in recent years.

The pandemic has intensified the challenges faced by Wall Street forecasters, as their ability to accurately predict the future has been diminished. According to recent polls by Dow Jones, economists expect the U.S. economy to have added 199,000 jobs in January. However, Wells Fargo anticipates a net decline of 100,000 payrolls, while Nomura predicts a decline of around 50,000 jobs.

The labor supply has been negatively impacted by Omicron due to quarantining workers, according to Bank of America economist Aditya Bhave. He wrote on Tuesday that there are significant downside risks to January payrolls, particularly for those with a high school degree or less who are more likely to be wage workers and may not be able to work due to illness or caring for someone with Covid.

If those who were marked as unemployed in January return to work, February could be a strong jobs month for both Wall Street and Washington.

The Omicron shock is expected to be temporary, as the increase in those not working due to Covid concerns has been minimal compared to the size of the wave. This indicates that the fear of Covid is gradually decreasing as a barrier to labor supply.

This report was contributed to by Michael Bloom, Nate Rattner, and Steve Liesman of CNBC.