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This story was updated Thursday, Sept. 3, 2020, at 10 p.m. with more information.

As Tennessee began paying federal Lost Wages Assistance to boost jobless benefits for unemployed Tennesseans, initial claims from recently laid-off workers rose in the Volunteer State last week despite a nationwide drop in new jobless claims.

Initial claims for jobless benefits rose 9.4% last week from the previous week across Tennessee to 12,035 filings, including 505 such claims from newly laid-off workers in Hamilton County. Although the number of new jobless claims filed last week was only about 10% of the peak levels reached in April when the coronavirus shutdown much of Tennessee's economy, the number of Tennesseans seeking unemployment assistance is still near historic highs.

Since mid March when the COVID-19 pandemic began shutting down businesses, 818,149 Tennesseans — or more than one of every four Tennessee workers on the job in February before the pandemic — have filed an unemployment claim in the past six months. While most of those laid-off workers have gone back to work, unemployment in Tennessee remains more than twice the level of a year earlier.

Tennessee and Georgia are both among the 10 worst states for recovering jobs last week, according to an analysis of unemployment filings released Thursday by WalletHub.

Both both Tennessee and Georgia boosted their jobless benefits for many unemployed persons last week by beginning to pay the new Lost Wage Assistance offered through the Federal Emergency Management Agency (FEMA) from $44 billion set aside for emergency relief. The new federal supplement pays an extra $300 a week on top of state jobless benefits for eligible claimants.

Although the Lost Wage Assistance is only half of the $600 federal supplement that was paid under a previous program that expired at the end of July, the start of the new federal supplemental payment program more than tripled what Tennessee paid out to its jobless claimants last week compared with the previous week.

The new Lost Wage Assistance payments are retroactive to Aug. 1 so many of those getting the new federal supplements last week got three weeks worth of the extra pay, or $900. But many part-time workers who qualified for less than $100 of benefits through the Tennessee Unemployment Insurance Program did not.

States recovering the least in the past week

 1. Louisiana

2. Georgia

3. Florida

4. Kansas

5. Kentucky

6. California

7. New Mexico

8. Alaska

9. Hawaii

10. Tennessee

Source: WalletHub analysis of unemployment claims

In all, the Tennessee Department of Labor and Workforce Development said Thursday it paid $265.2 million in jobless benefits last week to 281,761 claimants. That was up from the $72.3 million paid to 241,295 claimants in the previous week.

Due to catching up on earlier unpaid Lost Wage Assistance payments, the average Tennessean receiving jobless benefits got a check last week for $941.24.

Tennessee's state unemployment program pays up to $275 a week in benefits, and the Lost Wage Assistance is adding another $300 to those payments.

The FEMA funds are expected to last for a few more weeks while Congress debates whether to extend the federal supplemental unemployment benefits.

Tennessee received $236 million from FEMA on Aug. 24, enough to pay each eligible Tennesseans the extra $300 per week in retroactive benefits for the first three weeks of August. The Tennessee department of labor must apply for additional funding on a week-to-week basis, according to department spokesman Chris Cannon.

Nationwide, the number of laid-off Americans applying for unemployment benefits fell to roughly 880,000 last week, a sign of possible improvement but the evidence that the viral pandemic keeps forcing many businesses to slash jobs. The government said that 13.3 million people are continuing to receive traditional jobless benefits, up from 1.7 million a year ago.

Before the pandemic struck the economy in March, the number of people seeking jobless aid had never topped 700,000 in a week, not even during the depths of the 2007-2009 Great Recession. The economy has recovered 9.3 million, or only 42%, of the jobs that were lost in March and April.

"The data show that layoffs remain widespread and the recovery in the labor market is occurring at a frustratingly slow pace," economists Nancy Vanden Houten and Gregory Daco of Oxford Economics wrote in a research note.

A wave of layoff announcements by major companies has heightened concerns that many job losses will end up being permanent. Ford is offering buyouts to try to shrink its U.S. white-collar workforce by 1,400. MGM Resorts is laying off 18,000, about a fourth of its U.S. staff. Coca-Cola, heavily reliant on entertainment venues, is offering buyouts to 4,000.

United and American airlines, hurt by diminished air travel, said they will cut thousands of jobs unless the government provides additional aid to help cover payroll costs. Salesforce is cutting 1,000 jobs, Bed Bath & Beyond 2,800.

Many economists warn that mass layoffs will continue and that any recovery will likely falter as long as the virus rages and Congress doesn't extend another round of rescue aid for the unemployed and for state and local governments.

The outplacement and employment consultant firm Challenger, Gray & Christmas reported Thursday that job cuts announced by U.S.-based employers in August totaled 115,762, 116% higher than the August 2019 total of 53,480.

August's total is 56% lower than the 262,649 job cuts announced in July. But it was the highest total in August since 2002.

"The leading sector for job cuts last month was transportation, as airlines begin to make staffing decisions in the wake of decreased travel and uncertain federal intervention," said Andrew Challenger, senior vice president of Challenger, Gray & Christmas, Inc.. "An increasing number of companies that initially had temporary job cuts or furloughs are now making them permanent."

The Associated Press contributed to this report.

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

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