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FILE - In this March 25, 2020 file photo, United Airlines planes are parked at George Bush Intercontinental Airport in Houston. United Airlines will send layoff warnings to 36,000 employees - nearly half its U.S. staff - in the clearest signal yet of how deeply the virus outbreak is hurting the airline industry. United officials said Wednesday, July 8 that they still hope to limit the number of layoffs by offering early retirement, but they have to send notices this month to comply with a law requiring that workers get 60 days' notice ahead of mass job cuts. (AP Photo/David J. Phillip, File)

Despite a nationwide drop in initial jobless claims, the number of Tennesseans filing for unemployment benefits for the first time rose to a 6-week high last week as the economic bounce back from the coronavirus shutdown shows signs of stumbling.

Since mid March, Tennesseans have filed 673,279 initial claims for jobless benefits, including 28,843 new claims filed last week among those still being laid off. One of every five workers on the job in Tennessee in February has filed for jobless benefits during the past 16 weeks — a record jump in such claims.

"The increase last week was troubling and the direction is clearly an indicator that some portions of the economy are finding their rebound very difficult," said Dr. William Fox, director of the Boyd Center for Business and Economic Research at the University of Tennessee.

Last week marked the third consecutive week that new unemployment claims have increased in Tennessee despite a nationwide decline in Americans getting pink slips.

The number of new claims in Tennessee filed during the week of the July 4th holiday was only a fourth of the record peak for such claims reached in March when 112,00 persons filed for unemployment benefits after shelter-at-home orders were first issued to limit the spread of the COVID-19 virus. But layoff notices still remain near historic highs.

Jobless claims "are stalled out at a new normal of over a million new claims every week," said Daniel Zhao, an economist at Glassdoor. "The virus is in the driver's seat and we're along for the ride until the current public health crisis is resolved."

In Southeast Tennessee, jobless claims last week rose by 15.1% and were relatively evenly distributed between leisure and hospitality, professional services and retail businesses.

Earlier this week, Atlanta Federal Reserve Bank President Raphael Bostic told Tennessee business leaders that consumer confidence is key to the recovery. But he said such confidence could be eroded if the virus outbreak intensifies.

Coronavirus case counts are rising in Tennessee, Georgia and three dozen other states, and the nation as a whole has been shattering single-day records for new confirmed cases.

Credit card data from both Bank of America and J.P.Morgan Chase show that spending has slipped in the past two weeks, even in states that don't have sharp outbreaks.

"This suggests that renewed fears about the virus, rather than government restrictions, are driving the pullback in activity," said Andrew Hunter, senior U.S. economist at Capital Economics, a forecasting firm.

More than 1.3 million people applied for unemployment benefits last week nationwide, according to the Labor Department. That was down from 1.4 million the previous week but still roughly double the pre-pandemic weekly record.

Applications had fallen steadily in April and May but have barely declined in the past month.

Some economists have even warned that a so-called "double-dip" recession, in which the economy shrinks again after rebounding, could develop. Consumers, the primary driver of U.S. economic growth, are pulling back on spending in restaurants and bars, especially in the hardest-hit states. Some small businesses are closing, either under government orders or because of a lack of customers, according to private data.

Several companies have warned in recent days that more layoffs are coming. Levi's, the iconic jeans maker, said it will cut 700 corporate jobs. United Airlines has warned 36,000 of its employees — nearly half its workforce — that they could lose their jobs in October. (Airlines aren't allowed to cut jobs until then as a condition of accepting billions of dollars in government rescue aid.) Motorcycle maker Harley Davidson said it will eliminate 700 corporate jobs.

The total number of people receiving jobless benefits fell 700,000 to 18 million. That suggests that some companies are continuing to rehire a limited number of workers. An additional 1 million people sought benefits last week under a separate program for self-employed and gig workers that has made them eligible for aid for the first time.

The rise in jobless claims led Georgia last week to pay out more Unemployment Insurance (UI) benefits than ever previously paid. Payments of almost three times the amount in all of 2019 were issued to claimants during the short holiday week.

More than $857 million in regular state and federal UI benefit payments were made during the week preceding Independence Day to bring Georgia's total payments in excess of $8.5 billion since the middle of March.

"We are paying more Georgians more benefits than we ever have before," said Georgia Commissioner of Labor Mark Butler. "No one would have imagined in the same year we experienced our lowest monthly number of claims since 1975 that we would pay almost three years' worth of benefits in one week."

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