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Unemployment in the Chattanooga metro area dropped by nearly 30% last month as an estimated 15,369 workers in the 6-county Chattanooga region returned to their jobs following the shutdown of scores of local businesses earlier in this spring due to the coronavirus.

The jobless rate in the Chattanooga area fell to 9.4% last month compared with 13.2% in April. Despite the dramatic monthly gain in jobs, however, the local unemployment rate during May was still nearly triple the level at the start of the year. Chattanooga's total employment last month also was down by 15,369 jobs from a year ago.

Chattanooga's non-seasonally adjusted jobless rate last month was still below both the state and national averages, however, and was below most of the major metro areas in Tennessee and the MidSouth.

"We saw a significant improvement during May, which is encouraging, but we have a long way to go and there is still a lot of uncertainty," said Dr. Bill Fox, director of the Boyd Center for Business and Economic Research at the University of Tennessee.

That uncertainty was demonstrated again last week when the number of jobless claims filed in Tennessee rose from the previous week for the first time in over 10 weeks. The Tennessee Department of Labor and Workforce Development said 21,155 Tennesseans filed new claims for unemployment benefits last week, up from 19,925 the previous week.

Nationwide, nearly 1.5 million workers filed new claims for state unemployment insurance last week, the 14th week in a row that the figure has topped 1 million.

An additional 728,000 filed for benefits from Pandemic Unemployment Assistance, a federally funded emergency program aimed at covering the self-employed, independent contractors and other workers who don't qualify for traditional unemployment insurance.

The weekly pace of new state filings is a fraction of the more than 6.5 million recorded in early April. As businesses have reopened, some employees have been called back. The total number of people collecting state unemployment insurance for the week ending June 13 was 19.5 million, seasonally adjusted, a decrease of 767,000 from the previous week and down from nearly 25 million in early May.

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Jobless in May

Unemployment fell across the Chattanooga region last month:

* Dade County, 5.6%, down from 7.6%

* Catoosa County, 6.2%, down from 9.6% in April

* Walker County, 7.2%, down from 10.4% in April

* Bradley County, 9.5%, down from 13.5% in April

* Polk County, 9.8%, down from 13.6% in April

* Marion County, 9.9%, down from 14.4% in April

* Hamilton County, 10.3%, down from 14.4%

* Bledsoe County, 10.6%, down from 16.5% in April

* Murray County, 11.1%, down from 19.4% in April

* Whitfield County, 11.2%, down from 20% in April

* Sequatchie County, 11.7%, down form 16.4% in April

* McMinn County, 11.7%, down from 17.2% in April

* Meigs County, 11.8%, down from 18.4% in April

* Van Buren, 12.7%, down from 20% in April

* Chattooga County, 12.7%, down from 16.% in April

* Rhea County, 13.3%, down from 23.8% in April

* Coffee County, 14.2%, down from 1.8% in April

* Franklin County, 14.3%, down from 21% in April

* Grundy County, 17.4%, down from 24.7% in April

Sources: Georgia Department of Labor, Tennessee Department of Labor and Workforce Development

 

"The 19.5 million is still a very high number to have on unemployment benefits," said Torsten Slok, chief economist at Deutsche Bank Securities. In February, before the pandemic arrived in full force, that total stood at 2 million.

"It's difficult to argue that this is a real improvement," he said. "We still have a long, long road ahead of us."

The massive stimulus packages adopted by Congress to cushion the economic blow from the government-ordered business shutdowns have eased much of the income losses that businesses and individuals would have otherwise suffered with such historically high unemployment.

Tennessee is using such federal funds to pay all of its jobless benefits in the final six weeks of the current fiscal year — and may continue to do so in the next fiscal year — even as the federal government is supplementing unemployment insurance payments with the richest benefit payments in history. Last week, Tennessee paid out $298.6 million in jobless benefits to 294,363 unemployed Tennesseans.

Tennessee and many other states appear to still be working through a huge backlog of claims.

Since March 15, Tennessee has received 643,799 new claims for unemployment benefits. That represents nearly 20% of the workers that were on the job in Tennessee in February before the coronavirus pandemic shut down much of the economy.

Despite the record number of dislocated workers this spring, unemployment could have been much worse without the federal Paycheck Protection Program that gave low-rate and forgivable loans to businesses that kept their workers on staff.

But now as requirements for maintaining payrolls expire, more workers may be getting pink slips. A survey released this week from the National Federation of Independent Business found that 14% of employers planned to cut workers after making use of Paycheck Protection Program loans.

Nonetheless, unemployment rates still dropped across the Chattanooga region in all counties.

After the jobless rate in Dalton, Georgia jumped to 20% in April, unemployment in the Carpet Capital fell nearly in half last month, according to the Georgia Department of Labor.

But the 11.1% jobless rate for metro Dalton in May was still the highest among Georgia's 18 metro areas and triple Dalton's unemployment rate of a year ago when the jobless rate was only 3.8%.

Statewide, Georgia's unemployment rate fell from 12.6% in April to 9.7% in May as the state regained 144,877 jobs last month.

"The fact that almost every single monthly indicator in May's job market report was positive shows great promise to Georgia's economy up ahead," Georgia Labor Commissioner Mark Butler said. "Seeing these monthly numbers begin to increase means that we are definitely heading back in the right direction."

The Associated Press contributed to this report.

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

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