Tennessee unemployment rate fell to 11.3% in May
After reaching a record-breaking high of 15.5% in April, Tennessee’s unemployment rate fell in May to 11.3%.
May’s seasonally-adjusted unemployment rate represents a drop of just over four percentage points from the staggering increase in unemployment across the state in late March and early April as Tennesseans were told to shelter at home to slow the spread of COVID-19. Thousands of businesses temporarily closed their doors, some laying off their workers, while others announced permanent closures.
The Tennessee Department of Labor and Workforce Development initially reported a preliminary 14.7% seasonally adjusted unemployment rate for April, but raised that number to 15.5% after reviewing additional data, the state announced Thursday. This is the highest unemployment rate on record for the state, surpassing Tennessee’s previous high of 12.9% in December of 1982 and January of 1983.
In January, February and March, before Tennessee’s economy felt the full economic impact of the novel coronavirus pandemic, the unemployment rate hovered around 3.3%.
March’s seasonally-adjusted unemployment rate was calculated using data sampled from the first half of the month before job losses skyrocketed, resulting in a rate that does not reflect an unprecedented spike in unemployment claims in the latter half of the month.
The preliminary unemployment rate for the United States fell to 13.3% in May, a 1.4 percentage point decrease from the April rate of 14.7%. The number of weekly unemployment claims filed by Tennesseans has dropped steadily since it peaked in early April, falling below 20,000 claims in one week for the first time since March during the week ending in June 13.
This number still far surpasses the claim volume that the Tennessee Department of Labor and Workforce Development is accustomed to processing. Before the pandemic, the department might process around 15,000 new claims in a typical month. Since March 15, a total of 622,644 Tennesseans have filed new unemployment claims. Of these, 280,593 filed certifications during the week ending June 13 to continue their claims.
The state is using federal coronavirus relief funds to pay benefits. Last week, the Tennessee Department of Labor and Workforce Development paid more than 300,000 claims using more than $291 million in federal funds.
The state began to reopen its businesses using a phased strategy with health and safety requirements in late April. Recovery has been gradual.
Tennessee lost 265,800 jobs between May 2019 and May 2020, according to the Tennessee Department of Labor and Workforce Development. Tennessee’s leisure and hospitality sector was hit the hardest as the state’s usually vibrant tourism hotspots turned into temporary ghost towns. Statewide, employers added 93,900 nonfarm jobs between April and May, according to state data. Businesses in leisure and hospitality, manufacturing and service sectors saw the biggest increase in available jobs during this time.
But layoff reports filed recently with the state indicate that the hospitality industry may have an extended path to economic recovery.
Multiple hotels and attractions across Davidson County, including the Gaylord Opryland Resort & Convention Center, reported that around 3,000 workers may see their temporary layoffs unexpectedly extended, potentially for longer than six months.
Source: Knoxville News Sentinel, by Cassandra Stephenson
The East Tennessee Economic Development Agency markets and recruits business for the 15 counties in the greater Knoxville-Oak Ridge region of East Tennessee. Visit www.eteda.org
Published June 25, 2020