WJHL – New claims for unemployment in Tennessee continue an agonizingly slow plod downward, data released Thursday show, while continuing claims remain stuck within 7 percentage points of their peak level.
The data are only slightly less bad for Northeast Tennessee.
Economist Jon Smith is not surprised. “The economic shock that hit the system not only nationally but globally is totally unprecedented,” the director of East Tennessee State University’s Bureau of Business and Economic Research said Thursday.
“Accordingly, we really don’t know exactly what is going on,” Smith said. “We only have little pieces of information and each week that goes by we get a little more information.”
Several factors are contributing to the economic uncertainty, Smith said. They include global supply chains that are “absolutely in disarray,” as well as an international situation that will further stress those supply chains.
He said numerous small businesses are likely to shut down, and “we don’t know what kind of damage has been done to the global economic system.”
For the week ended May 30, 302,260 Tennesseans filed ongoing claims — down just 2.5 percent from the prior week and just 6.9 percent from April 25, which was the last week of large increases.
In Northeast Tennessee’s eight counties, ongoing claims totaled 15,270. That’s a 5.3 percent decline from a week earlier and a 17.9 percent decrease from the April 25 peak of 18,595.
New claims dropped statewide by 12.5 percent from last week, to 22,784. They dropped 23 percent in Northeast Tennessee, to 694. New claims regionally are down 71 percent from April 25, while they’re down 48 percent statewide over the same period.
The Congressional Budget Office (CBO) released interim economic projections for 2020 and 2021 May 19. Those predicted unemployment rates of 15.1 percent for the current (April-June) quarter, 15.8 percent for the summer and 11.5 percent for the last quarter of 2020.
For 2021, the rate was projected to remain at 9.3 percent for the year as a whole. Smith said a new CBO perspective released three days ago was even more negative, but added that everything is guesswork right now.
At the state level, Moody’s Analytics shows Tennessee as one of 16 states with a “fiscal shock” of less than 15 percent using their baseline assumption. Tennessee’s percentage, though, is 14.8 – a combination of projected tax revenue shortfall (10.8 percent) and Medicaid spending increase.
These projections suggest that new and ongoing unemployment claims are likely to remain stubbornly high for many months — far beyond the current period for federal pandemic unemployment assistance. That $600 weekly addition to Tennessee’s normal $275 maximum benefit is currently set to end July 31.