Chris Cannon, a spokesperson for the Tennessee Department of Labor, said unemployment claims from Northeast Tennessee residents jumped from 81 new claims during the week of March 14 to 4,749 new claims during the week of March 28.
The department includes Hancock, Hawkins, Greene, Sullivan, Washington, Unicoi, Carter and Johnson counties in its Northeast Tennessee district.
Stemming from the economic fallout caused by the novel coronavirus (COVID-19), which has prompted businesses across the nation to temporarily close, the number of new unemployment claims filed across state have jumped by 3,397% over the course of a few weeks, increasing from 2,702 new claims during the week of March 14 to 94,492 the week of March 28.
In a span of two weeks, Tennessee has seen more than 120,000 unemployment claims filed across the state.
“This is an unprecedented spike for the state of Tennessee and its unemployment system,” Cannon said. “Back during the great recession in 2009 we did see high unemployment, but it wasn’t a spike. It was more spread out over time as layoffs took place. Here, it’s just overnight basically.”
Nationwide, the U.S. Department of Labor reported that 6.6 million Americans filed for unemployment benefits the week of March 28, shattering the record of 3.3 million — set just the week before.
With that unprecedented spike in filings comes an unprecedented demand for service.
Tennesseans can file claims online at jobs4tn.gov, but the state also has phone lines open — the number to call is 844-432-0969 — for people who don’t have ready access to the internet or are struggling to file a claim through the state’s website.
“Now, keep in mind there are literally tens of thousands of people calling that line, there are literally tens of thousands of people filing online every day,” Cannon said, “and that has caused some responsiveness issues.”
To add capacity, the department has shifted resources and employees so that more people can work unemployment claims. The center has also extended hours at its call centers to 8 a.m. to 8 p.m. Employees are also working 9 a.m. to 5:30 p.m. on weekends to answer basic questions.
Typically, the department would have 100 claims agents working in three different call centers across the state.
“Obviously, this happened overnight,” Cannon said. “We didn’t have those resources right away.”
Starting March 23, the state limited access to American Job Centers and shifted employees from those facilities to work unemployment claims, which Cannon said tripled the number of available staff.
At the start of the outbreak, Cannon said Tennessee’s unemployment trust fund, which the government uses to fund statewide unemployment benefits, contained $1.26 billion.
Cannon said the state has economists evaluating the health of the trust fund on a daily basis.
“Right now they feel the trust fund at its current level can sustain these levels of unemployment claims,” Cannon said, “but if it does get down to a point where the trust fund seems like it can’t ... the federal government is making loans to states to make sure their trust funds are solid.”
On a national scale, Fred Mackara, an associate professor in the department of economics and finance at East Tennessee State University, said new claims are a leading indicator of economic conditions: A declining number of new claims typically predicts good outcomes.
“You turn that on its head and you say new claims are rising, that’s an indicator that economic conditions are going to start declining,” Mackara said, “and of course they already have.”
Citing a report by the firm Challenger, Gray & Christmas, Mackara said the number of planned layoffs announced by companies increased from 57,000 in February to 222,000 in March, with nearly two-thirds of those attributed to COVID-19.
In the same report, however, Mackara said the number of announced hires stood at about 820,000, most of which were in retail and transportation.
“That’s kind of a positive sign there that there could be good news on the horizon, even though we’re seeing a lot of bad news right now,” he said.