Unemployment spikes to worst level since Depression

Nathan Baker • Updated May 8, 2020 at 6:33 PM

The effects of closed businesses and stay-at-home orders through April can be seen in national and state unemployment figures, but officials hope reopening the economy can put displaced workers back on the job.

This week, the U.S. Bureau of Labor Statistics reported 20.5 million jobs lost nationwide and a 10.3-percentage-point rise in the unemployment rate from March to April. The unemployment rate was 14.7%.

The data represented the worst single-month jobs report since the Great Depression.

All industry sectors were impacted by job losses, but the hardest hit was leisure and hospitality, which fell 47%. Three-quarters of the losses were in food services and drinking places.

The bureau won’t release April’s state-level employment statistics until later this month, but unemployment claims filed in Tennessee show an expected increase.

For the state, the largest number of new unemployment claims came in the week ending April 4, when 116,141 people filed for unemployment benefits. For comparison, 2,702 new claims were filed in the second week of March, before widespread efforts to control the spread of the novel coronavirus were put in place.

The number of continued claims, the people who recertified for unemployment benefits from one week to the next, were highest two weeks ago, when 324,543 claims were continued.

Though hundreds of thousands of Tennesseans are still out of work, Chris Cannon, spokesperson for the state Department of Labor and Workforce Development, said the numbers could show a bright spot.

“For the fourth week in a row, Tennessee has seen a decrease in the number of new claims filed, which points to fewer people seeking unemployment,” he said in an email. “For the week ending May 2, for the first week, the number of continued claims decreased. That indicates there are fewer claimants certifying each week to continue benefits and it’s the first time the state has seen that number go down since this unprecedented spike in unemployment started in mid-March.”

The number of new claims is on a downward trend, he said; we’ll need to wait a few weeks to see if the continued claims are also trending down.

In Northeast Tennessee, new unemployment claims were highest the same week the rest of the state saw its peak. 6,419 claims were filed that week.

Last week, 1,781 new claims were filed in the region.

Many small businesses in the region were affected by stay-at-home orders, namely restaurants and retail shops. Chain companies with locations in the area also temporarily laid off staff.

Hooters of America and OS Restaurant Services, which owns and operates Bonefish Grill, Carrabba’s Italian Grill and Outback Steakhouse restaurants filed layoff notices with the state, as did manufacturer Dentsply Sirona and janitorial services company Prestige Maintenance USA.

Lottie Ryans, Director of Workforce and Literacy Initiatives for the First Tennessee Development District, said times are trying, but, like the during Great Recession, she believes there are career and business opportunities available.

“Some businesses have had to retool, restaurants have worked out delivery options and curbside pickup, and there are grants available for laid-off workers to advance their education,” she said.

With layoffs in hospitality, the state’s Talent Exchange helped find unemployed people with transferable skills jobs in grocery and retail, held open during the pandemic as essential businesses. Northeast State Community College offered free online continuing education programs.

Ryans said expanded internet access likely allowed thousands of people in the area to work from home and keep their jobs.

“If this happened 10 years ago, and people didn’t have those opportunities, can you imagine the devastation?” she asked.

Going forward, Ryans said she expects the local economy to recover.

Some small businesses, already operating on thin margins, may not reopen, she said, but most should return.