Staff Photo by Robin Rudd / Marco's Pizza in East Brainerd has a help wanted sign out front.

Unemployment rose last month in the Chattanooga area to its highest rate in eight months, but many employers say they are still having trouble filling vacancies as the economy rebounds from the coronavirus pandemic.

The jobless rate in the 6-county Chattanooga metropolitan area jumped in June to 5.3%, its highest non-seasonally adjusted rate since last October and nearly double the record low reached in the area two years ago before the pandemic slowed the economy. State employment figures released Thursday showed unemployment levels rose in all 20 counties of Southeast Tennessee and Northwest Georgia as an influx of summertime workers exceeded the growth in employment last month.

"Much of this increase is due to seasonal factors, but we're continuing to see some of the effects of the pandemic and the disruptions it has caused for both employers and employees," said Dr. Bill Fox, the state's chief economic forecaster who heads the Boyd Center for Business and Economic Research at the University of Tennessee.

The pandemic encouraged many aging Baby Boomers to retire and has kept more parents out of the workforce as schools and day cares limited operations. Other workers after spending more time at home have re-evaluated their work situations and are quitting or changing jobs, which also can temporarily push up the jobless rate during their transitions.

To be sure, the jobless rate in Chattanooga during June was still only about a third of the peak 14.1% level reached in April 2020 when the pandemic forced many businesses and schools to shut down and idle their staffs.

"The economy overall is still growing at a healthy pace," Fox said.

Chattanooga employers have added back nearly 37,000 jobs in the past 14 months, but employment levels remain below the pre-pandemic peaks and some staffing officials worry that demographic changes may make it difficult to fill some jobs.

Brad Hake, who has owned the local franchise of Express Employment Professionals since 1999, said he has never seen a tighter labor market than what Chattanooga has had this year coming out of the pandemic and he worries it will take many more months until some employers are able to fill job vacancies.

"We have more jobs than people and there is not a day that goes by that we have accomplished all that we need to to fill our available openings," Hake said. "This is as difficult of an employment market as I have seen. I think we're seeing a real change in the attitudes of many workers and younger people who are more reluctant about working in many types of jobs and want a different kind of work-life balance than some of us in previous generations may have had."

Despite pay raises for most lower-paying occupations, hiring signs still are displayed at dozens of area restaurants, some of which have had to restrict business or operating hours because of the inability to get more workers.

"We're not seeing as many young people eager to get a job when they are young and work a lot of hours to make money like what we have seen among Generation X or Baby Boomer in the past," Hake said.

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A car passes a hiring banner in Sacramento, Calif., Friday, July 16, 2021. (AP Photo/Rich Pedroncelli))

Fox said child care responsibilities for many parents who have had to keep their children at home and the ability to get extra government support during the pandemic has kept some workers out of the labor market. As school resumes next month and federal stimulus measures are reduced, some workers may return to the labor market.

Tennessee and Georgia both cut off the supplemental federal jobless benefits for unemployed persons in the past month to help spur more workers to return to the labor market. But so far, the results appear mixed about whether the change has made much difference.

In spite of the jump in June's jobless rate, Georgia Labor Commissioner Mark Butler said the overall economy is continuing to grow and add more jobs.

"We are continuing to see an increase in the number of jobs available and very few actual reported layoffs through the WARN system, both good signs of an improving economy," Butler said Thursday. "We must continue to work together to connect those seeking work with the many jobs available that offer stable salaries and competitive benefits."

In Dalton, the unemployment rate was up five-tenths to 4.4 percent from May to June. A year ago, the rate was 8.1 percent.

In metropolitan Cleveland, Tennessee, the jobless rate last month jumped from 4.9% in May to 6% in June. But the rate was still down from 8.9% a year earlier.

Across the region, unemployment was the lowest in Dade County in Northwest Georgia at 2.9% and highest in Grundy County, where the 8.1% jobless rate in June was among the highest in all of Tennessee.

The increase in unemployment in June may continue into July based upon new unemployment claims filed last week. Nationwide, the number of Americans seeking unemployment benefits rose last week from the lowest point of the pandemic, even as the job market appears to be rebounding on the strength of a reopened economy.

The Labor Department said Thursday that jobless claims increased last week to 419,000, the most in two months, from 368,000 the previous week. The number of first-time applications, which generally tracks layoffs, has fallen steadily since topping 900,000 in early January.

Economists characterized last week's increase as most likely a blip caused by some one-time factors and partly a result of the inevitable bumpiness in the week-to-week data.

"I do not worry that this reading signals a sudden weakening in labor demand," said Stephen Stanley, an economist at Amherst Pierpont Securities. "In fact, I am quite confident that it does not."

Complaints by companies that they can't find enough workers led Tennessee, Georgia and 20 other states to prematurely end a $300-a-week federal unemployment benefit, which comes on top of state jobless aid. But as those extra benefits were being cut off this month, an expanded child tax credit began which is also proving more money for parents with children age 17 and younger.

The early cutoffs of expanded unemployment aid have contributed to a steady decline in the number of people receiving unemployment benefits. That number fell to 12.6 million in the week ending July 3, the latest period for which data is available, down from 13.8 million the previous week.

The Associated Press contributed to this report.

Contact Dave Flessner at

Jobless in June

The non-seasonally adjusted unemployment rate rose in all 20 counties in the Chattanooga region last month. Jobless rates in June remained lower in most counties in Northwest Georgia compared with those in Southeast Tennessee.

* 2.9% in Dade County, Georgia, up from 2.5% in May

* 3.1% in Catoosa County, Georgia, up from 2.6% in May

* 3.5% in Walker County, Georgia, up from 3% in May

* 3.5% in Gordon County, Georgia, up from 3.1% in May

* 4.3% in Whitfield County, Georgia, up from 3.8% in May

* 4.7% in Murray County, Georgia, up from 4.2% in May

* 5.3% in Coffee County, up from 4.4% in May

* 5.4% in Franklin County, up from 4.1% in May

* 5.4% in Chattooga, Georgia, up from 4.7% in May

* 5,5% in Polk County, up from 4.5% in May

* 5.7% in Bradley County, up from 4.3% in May

* 6.1% in Hamilton County, up from 4.3% in May

* 6.1% in Marion County, up from 4.7% in May

* 6,3% in Sequatchie County, up from 4.7% in May

* 6.4% in McMinn County, up from 5% in May

* 6.7% in Meigs County, up from 5.1% in May

* 6.8% in Van Buren County, up from 5.4% in May

* 6.9% in Rhea County, up from 5.6% in May

* 7.5% in Bledsoe County, up from 5.7% in May

* 8.1% in Grundy County, up from 6.4% in May

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