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Photo by Dave Flessner / Despite continued high rates of jobless claims, some area employers like Dominos are hiring. The pizza chain is hiring 250 workers for its 21 stores in the Chattanooga area.

The number of Tennesseans getting jobless benefits last week dropped to the lowest level in more than six months as the job market continued to bounce back and the size of unemployment benefit checks continued to shrink.

The Tennessee Department of Labor and Workforce Development said Thursday that the state paid jobless benefits to 199,684 unemployed Tennesseans last week — the fewest number since March. The average jobless claimant in Tennessee received $271.38 in weekly benefits last week, or less than a third of what the typical unemployed person received in July before the $600-a-week federal supplements ran out.

Last week, 9,839 Tennesseans filed initial claims for unemployment, including 457 newly laid off workers in Hamilton County. Nationwide, the number of Americans seeking unemployment benefits dipped last week to a still-high 840,000, evidence that layoffs remain elevated seven months into the pandemic recession.

"Some of these new layoffs are coming from firms that didn't want or didn't have to lay people off at first," said Constance Hunter, chief economist at KPMG. Now, "they have no choice but to start reducing their workforce."

Disney said last week that it would cut 28,000 jobs. And American Airlines and United Airlines combined furloughed 32,000 employees last week. Airlines had been barred from cutting jobs as long as they were receiving federal aid, which expired this month. The American Hotel & Lodging Association has said that nearly three-quarters of hotels say they'll have to lay off more workers without further financial aid.

One reason layoffs remain high is that companies often hold on to workers when a recession begins, if they can, in hopes of outlasting the downturn. Yet if the recession drags on, many will eventually give up and cut jobs.

The Labor Department's report Thursday indicated that more Americans were laid off last week than in any week during the 2008-2009 Great Recession.

"New claims appear to have settled into a still historically high pattern, numbering in the 800,000 range since late August," said Mark Hamrick, senior economic analyst for Bankrate.com. "The intermediate-term outlook remains quite concerning for several reasons, although we remain hopeful that the eventual availability of effective and safe vaccines will get us to a better place on a number of fronts."

Some states are still processing backlogged applications from this summer, Pancotti noted. California, for example, stopped accepting new claims for two weeks so it could clear a backlog of 600,000 applications that are more than three weeks old.

"We can't view it as real-time job separation data," said Elizabeth Pancotti, a policy adviser at Employ America, a left-leaning advocacy group, referring to layoffs. "We're still seeing massive overcounting of initial claims."

This spring, Congress created a new program, Pandemic Unemployment Assistance, or PUA, that made self-employed and gig workers eligible for unemployment aid for the first time. Yet in many states, to qualify for the PUA program, the unemployed must first apply for regular jobless benefits. Only after they have been rejected under that system can they apply for PUA.

Thursday's report from the Labor Department said the number of people who are continuing to receive unemployment benefits dropped 1 million to 11 million. The decline suggests that many of the unemployed are finding work. But it also reflects the fact that some have used up the 26 weeks of their regular state benefits and have transitioned to extended benefit programs.

According to the Tennessee Department of Labor and Workforce Development website, the state had job listings Thursday for 216,203 jobs.

— Compiled by Dave Flessner

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