CHATTANOOGA Jobless rate falls in June

Employment still down 21,522 jobs from a year ago

Chattanooga’s jobless rate fell last month for the second consecutive month from the record peak reached in April, but 21,552 fewer Chattanoogans were on the job during June compared with a year earlier, according to figures released Thursday by the Tennessee Department of Labor and Workforce Development.

With many entertainment, sports and hospitality businesses still limited by the coronavirus, employment in the six-county Chattanooga area was 8% below a year ago last month even after the return of nearly 10,000 local jobs since April.

Unemployment in metropolitan Chattanooga last month averaged 8.2%, down by more than a third from the peak 13.3% jobless rate recorded in April but still more than double Chattanooga’s 3.7% jobless rate a year earlier in June 2019.

“We’re seeing improvement in economic activity, but it’s likely to be a long time before we get back to the employment levels we were at before the pandemic,” said Dr. William Fox, director of the Boyd Center for Business and Economic Research at the University of Tennessee.

Some workers have dropped out of the labor market, fearful of being infected in many jobs that interact with other unknown customers or employees. Others have no job to return to in the current economy and many have calculated that the enhanced unemployment benefits provided so far are better than taking lowerpaying job, Fox said.

The extra $600-a-week benefit paid to most unemployed workers over the past three months due to the pandemic is scheduled to run out Saturday in Tennessee unless Congress decides to extend those benefits. That may encourage more workers to accept available, lower-paying or temporary jobs such as those being advertised at many grocery stores, restaurants or by the federal government for the 2020 census count.

But some economists fear that the loss of income with any drop in jobless benefits, combined with the rising number of COVID-19 infections in Chattanooga and many other cities, could undermine economic confidence and slow the recovery.

“At this stage, you’re seeing all the wrong elements for recovery,” said Gregory Daco, the chief U.S. economist at Oxford Economics. “A deteriorating health situation, a weakening labor market and a softening path for demand.”

Initial jobless claims rose again in Tennessee last week from the previous week with 25,749 laid off workers making their first unemployment claim — or nearly 12 times as many as the 2,233 who filed such claims in the same week a year ago. Since the pandemic began shutting down businesses in March, a total of 740,123 Tennessee workers — or one out of five workers on the job in February — have filed claims for jobless benefits although only 285,10 continued to receive benefits last week, according to the Tennessee Department of Labor.

Nationwide, the Labor Department said Thursday the number of new jobless claims rose to 1.4 million last year and roughly 32 million people are receiving unemployment benefits.

Last week’s pace of unemployment applications was the 18th straight week it’s topped 1 million and was up from 1.3 million the previous week. Before the pandemic, the number of weekly applications had never exceeded 700,000.

Nonetheless, the non-seasonally-adjusted unemployment rate fell in 76 of Tennessee’s 95 counties during June, including all counties in Southeast Tennessee, as Tennessee continues to reopen after many businesses closed in the spring to help curb the spread of COVID-19.

Williamson County recorded the lowest unemployment rate in Tennessee during June at 6.7%, while Shelby and Grundy counties had the highest unemployment rates at 13.2% and 13.1%, respectively.

In Georgia, state Labor Commissioner Mark Butler said most of the state’s metro areas had a drop in the jobless rate during June even though the coronavirus has stinted yearly job growth and left unemployment rates double year-ago levels.

“June continued to show positive growth across all MSAs (metropolitan statistical areas),” Butler said, noting that the jobless rate in metro Dalton fell 3.3 percentage points to 7.6%. “We saw almost all major indicators head in the right direction but continue to work to support Georgia businesses and get Georgians back to work.”

Butler said Georgia paid over $1 billion in unemployment benefits last week, more than the $922 million issued over the past three years combined. The state paid over $143 million in regular unemployment benefits and distributed over $886 million in federal funds including Pandemic Emergency Unemployment Compensation (PEUC) payments, Pandemic Unemployment Assistance (PUA) payments, Federal Pandemic Unemployment Compensation (FPUC) supplements, and State Extended Benefits. Since March 21, almost $10.5 billion has been paid to eligible Georgians in unemployment benefits.

“The fact that we paid more than $1 billion in benefits in five days is a huge accomplishment,” Butler said. “When you think that the average weekly benefit amount is $246, the sheer volume of payments we are issuing is phenomenal.”