More than 10% of Chattanooga area workers file for unemployment due to COVID-19 crisis

One of every nine workers on the job in Southeast Tennessee a month ago has filed for unemployment benefits since the coronavirus stalled much of the region's economy due to the shutdown of retail stores, restaurants and many service industries.

The Tennessee Department of Labor and Workforce Development said Thursday that 33,329 people in the 10-county Chattanooga region of Southeast Tennessee filed initial claims for unemployment since Chattanooga Mayor Andy Berke shut down non-essential businesses last month. The layoffs have affected 11.8% of workers who were employed in those counties during February.

Statewide, a record 249,729 persons have filed initial claims for jobless benefits in the past three weeks, and that number is expected to rise further in coming weeks.

"The good news is that we went from over 116,000 initial claims for unemployment in the week before last to under 75,000 last week, but these are still extraordinarily high numbers and show the depth of economic downturn we are now seeing," said Bill Fox, director of the Boyd Center for Business and Economic Research at the University of Tennessee. "I'm afraid we could see unemployment approaching 15% in April."

Nationwide, the wave of layoffs that has engulfed the U.S. economy since the coronavirus struck has forced roughly 22 million Americans to seek jobless benefits in the past month, including 5.2 million more people last week. Roughly one in seven workers across the United States have lost their jobs over the past month, according to figures released by the U.S. Department of Labor.

"This crisis combines the scale of a national economic downturn with the pace of a natural disaster," said Daniel Zhao, senior economist at Glassdoor. "And that's really unprecedented in American economic history."

The grim figures point to an economy that is tumbling into what appears to be the worst economic downturn since the Great Depression in the 1930s, although economists expect it to be much shorter due to the relief measures taken by Congress and the Federal Reserve Bank in recent weeks.

The nation's output could shrink by roughly 10.5% before it starts to rebound, according to Ryan Sweet, an economist at Moody's Analytics. That would be more than double the contraction that occurred during the 2008-2009 recession, which was the worst downturn since the Great Depression.

In Georgia, the state labor department has processed 861,000 claims for jobless benefits, out of a population of more than 10 million people.

"We are reaching unprecedented claim levels of almost 1 million Georgians filing for unemployment," Georgia Labor Commissioner Mark Butler said Thursday. "This is a massive undertaking."

The financial impact of the job losses is being limited, to some extent, by the most generous unemployment benefits in history, at least for the next four months.

The maximum $275 weekly jobless benefit paid to unemployed people in Tennessee under the state's unemployment insurance program is being supplemented with an extra $600 paid from the federal relief package adopted by Congress last month. That means that jobless Tennesseans can be paid as much as $875 a week while they are unemployed, although not all of those benefits have yet reached those on the unemployment benefit program or others still trying to claim such benefits.

In Georgia, the state pays up to $330 a week in state benefits, so an unemployed person in the Peach State could make as much as $930 a week, or the equivalent of $48,360 a year, under the enhanced jobless benefits being paid during the coronavirus crisis.

Amid the shutdown of most unemployment offices due to the coronavirus, most states also have relaxed enforcement of previous job search requirements for those getting benefits, at least for now.

Unemployment has jumped faster than at any time in U.S. history because nearly all businesses deemed non-essential have been closed or forced to limit their operations in most states.

Some economists say the unemployment rate could reach as high as 20% in April, which would be the highest rate since the Great Depression. By comparison, unemployment peaked in metropolitan Chattanooga during the worst of the Great Recession in 2009 at 10.2%.

Ahead of the jump in jobless claims last month, Tennessee's economy remained robust with a 3.5% jobless rate, state figures released Thursday show. Unemployment in Tennessee measured duirng the first two weeks of March remained below the U.S. jobless rate of 4.4% for the same period.

Berke and the mayors of Tennessee's other major cities announced a task force Thursday to study how to gradually restart the economy to revive business activity while still trying to limit the spread of the coronavirus. A prolonged shutdown of many restaurants, stores and spas is threatening to undermine many of those businesses and dramatically cut sales tax revenues, which fund about 60% of Tennessee's state budget.

Up to 50 million jobs are vulnerable to coronavirus-related layoffs, economists say - about one-third of all positions in the United States. That figure is based on a calculation of jobs that are deemed non-essential by state and federal governments and that cannot be done from home.

All told, nearly 12 million people are now receiving unemployment checks, essentially matching the peak reached in January 2010, shortly after the Great Recession officially ended.

Retailers and other service companies keep cutting jobs. The electronics chain Best Buy said this week that it will furlough 51,000 of its hourly employees, including nearly all of its part-time workers. Royal Caribbean Cruises will cut one-quarter of its 5,000 corporate employees.

Some state unemployment agencies, swamped by applications, are still working through backlogs, suggesting that the claims figures will likely remain high in the coming weeks.

In most states, self-employed, freelance and gig workers aren't yet able to file applications for unemployment aid under new rules enacted by the federal government's $2.2 trillion economic relief package. That legislation extended eligibility for aid to those categories of workers for the first time. But most states have to establish new systems to handle their jobless claims.

The Associated Press contributed to this story.

Contact Dave Flessner at dflessner@timesfreepress.com or 423-757-6340.