The number of Tennesseans applying for unemployment benefits rose last week to its highest level in six weeks, signaling that many employers are still cutting jobs even as more people are vaccinated against COVID-19, consumers gain confidence and the government distributes aid throughout the economy.
The Tennessee Department of Labor and Workforce Development said Thursday that 10,847 persons filed initial claims after losing their jobs last week, including 876 new claims in Hamilton County and 615 new claims in Bradley County. Initial claims across Tennessee jumped nearly 43% from the previous week and swelled the total number of jobless claims filed in the past year since the pandemic began to more than 1.1 million in Tennessee.
Nationwide, applications for unemployment assistance also rose by 16,000 to 744,000. The Labor Department reported jobless claims have declined sharply since the virus slammed into the economy in March of last year. But they remain stubbornly high by historical standards: Before the pandemic erupted, weekly applications typically remained below 220,000 a week.
"It is important to remember the still widespread financial distress stemming from the economic downturn, " said Mark Hamrick, senior economic analyst for Bankrate.com "We've come a long way, but the healing of the economy and job market remain works in progress. Better times are ahead."
For the week ending March 27, more than 3.7 million people were receiving traditional state unemployment benefits, including 116,763 in Tennessee. If you include supplemental federal programs that were established last year to help the unemployed endure the health crisis, a total of 18.2 million are receiving some form of jobless aid the week of March 20.
Buoyed by supplemental federal payments for unemployment insurance funds, the average jobless Tennessean receiving unemployment insurance last week received $608.85 in weekly benefits — or nearly twice the state's $275-a-week payment for unemployment benefits prior to COVID-19.
Economists monitor weekly jobless claims for early signs of where the job market is headed. Applications are usually a proxy for layoffs: They typically decline as the economy improves. Or they rise as employers retrench in response to sluggish consumer demand.
During the pandemic, though, the numbers have become a less reliable barometer. States have struggled to clear backlogs of unemployment applications, and suspected fraud has clouded the actual volume of job cuts.
By nearly all measures, though, the economy has been strengthening. During March, employers added 916,000 jobs, the most since August, and the unemployment rate declined from 6.2% to 6%. In February, the pace of job openings reached its highest level on record. Last month, consumer confidence posted its highest reading in a year.
And this week, the International Monetary Fund forecast that the U.S. economy will grow 6.4% this year. That would fastest annual pace since 1984 and the strongest among the world's wealthiest countries.
"Jobless claims may bounce around week to week as the recovery takes hold, but we expect they will start to decline more consistently as the economy gains momentum," economists Nancy Vanden Houten and Gregory Daco of Oxford Economics said in a research note. "We expect the stellar March jobs report to be the first of many and look for a hiring boom in the spring and summer months."
Still, the United States still has 8.4 million fewer jobs than it had in February 2020, just before the pandemic struck.
— Compiled by Dave Flessner