After an unexpectedly large drop in unemployment in November, Tennessee's jobless rate rose again at the end of 2020 and could remain elevated in the new year, according to jobs figures released Thursday.
The Tennessee Department of Labor and Workforce Development said Tennessee's statewide jobless rate rose to 6.4% last month, up from the revised 5.2% rate in November. Although still below the U.S. unemployment rate of 6.7% last month, unemployment in Tennessee at the end of 2020 was nearly double the 3.3% rate in the state a year earlier.
In neighboring Georgia, unemployment dropped by 0.1 percentage points last month to reach 5.6%. Georgia employers added 44,700 jobs in December, but total employment in Georgia still was down by 81,200 jobs from a year ago.
Tennessee was still down by 100,300 jobs, or 3.2%, from a year ago last month even though the Volunteer State has regained more than two thirds of the jobs it initially lost when the coronavirus pandemic shut down many businesses last spring.
Unemployment across Tennessee and Georgia has fluctuated since the start of the COVID-19 pandemic in March 2020. Tennessee's jobless rate reached its all-time high of 15.5% in April and Georgia's unemployment rate also peaked in April at 12.6%. The jobless rate has trended lower in both states for most of the past eight months, with some fluctuations, as the economy has begun to reopen.
But economists caution that it will likely take months, or perhaps even years, to regain all of the jobs lost during the virus outbreak.
"The pandemic accelerated a lot of job trends and some of the jobs that were lost may never come back," said Bill Fox, director of the Boyd Center for Business and Economic Research at the University of Tennessee. "But overall, employment is moving in the right direction and we continue to believe that as the vaccines are distributed and economic life returns more to normal later this year, we will see continued improvement in the job market."
According to the household survey by the U.S. Bureau of Labor Statistics, employment across Tennessee fell by 61,698 jobs from November to December. A separate business survey, however, showed job gains of 10,800 across Tennessee during the month.
Jobless in December
* 5.6% - Unemployment rate in Georgia, down from 5.7% in November* 6.2% - Unemployment rate in Tennessee, up from revised 5.2% in November* 6.7% - Unemployment rate in U.S., unchanged since NovemberSources: U.S. Bureau of Labor Statistics, Georgia Department of Labor and the Tennessee Department of Labor and Workforce Development.
Along with more jobs, employers reported the average manufacturing workweek also increased in December from 41.3 hours in November to 42.3 hours last month. Average hourly earnings for manufacturing workers in Tennessee also increased by 76 cents an hour during December to an average of $21.43.
In Georgia, employment growth more than doubled last month from November's pace.
"December is yet another month where we have seen job growth throughout the state," Georgia Labor Commissioner Mark Butler said. "Georgia has gained back 82% of the jobs we lost at the beginning of the pandemic and continues to remain strong in economic growth and business development."
Butler said the state's jobs website, EmployGeorgia.com, listed 170,085 open jobs on Thursday. Tennessee's jobs website, jobs4tn.gov, listed 243,244 openings on Thursday.
Nonetheless, the Labor Department also reported Thursday that initial jobless claims last week remained higher than recent months, although down slightly from the previous week in Tennessee. Last week, 18,237 new claims were filed for unemployment benefits, including 714 in Hamilton County and 271 in Bradley County from newly laid-off workers.
Initial claims in Tennessee last week were down from the 21,954 claims the previous week but remained more than triple the pre-pandemic levels.
"The rise in COVID cases, combined with a normal seasonal pattern following the holidays, have moved up the jobless claims," Fox said.
In the first three weeks in January, initial jobless claims have been more than double the previous two months, although some of the increase is typical following the holidays. Mark Hamrick, senior economic analyst for Bankrate.com, said the historically high rates of jobless claims suggest that unemployment may remain above the pre-pandemic level for some time.
"Some 44 weeks into the pandemic caused downturn, unemployment claims remain very much elevated in the latest week," Hamrick said . "It is hard to imagine a scenario where the forthcoming monthly snapshot will look robust. Indeed, the notion of a winter of discontent has taken on new and more distressing meaning."
Nationwide, the Labor Department said 5.1 million Americans are continuing to receive state jobless benefits, down from 5.2 million in the previous week. That suggests that while some of the unemployed are finding jobs, others are likely using up their state benefits and transitioning to separate extended-benefit programs.
More than 10 million people are receiving aid from those extended programs, which now offer up to 50 weeks of benefits, or from a new program that provides benefits to contractors and the self-employed. All told, nearly 16 million people were on unemployment in the week that ended Jan. 2, the latest period for which data is available.
"Unemployment claims continue to show a job market unable to progress further as long as COVID-19 remains in the driver's seat," said Daniel Zhao, senior economist at Glassdoor. "While the vaccine offers a light at the end of the tunnel, we're still far away from a complete reopening of the economy that could drive rehiring and stem further layoffs."
The Associated Press contributed to this report. Contact Dave Flessner at dflessner@timesfreepress.com or at 757-6340