Unemployment Claims Spike with CARES Act Extension

Another 21,954 Tennesseans Have Filed New Unemployment Claims. This Is The Highest Number Of New Claims Tennessee Has Seen In A Single Week Since July.

Photo: The Tennessee-Georgia state line dividing Rossville, Georgia, and Chattanooga, Tennessee, along U.S. Route 27.

Photo Credit: Brian Stansberry

Published January 15, 2021

Every nation in the world has been backed into a corner by COVID-19 in the last 12 months. None are unique in their struggle, but some are unique in response.

We have seen even within our own country, a wide range of reactions and solutions offered to help people make it through this pandemic.

For the most part, officials in Tennessee have maintained public interest by putting primary responsibility in the hands of the people.

Hamilton County Mayor Coppinger recently extended the mask mandate through the end of March and the Hamilton County Health Department tried to make an example out of Bud’s Sports Bar, but this mandate most often leaves power in the hands of proprietors.

Despite best efforts to support local businesses, an increasing number of individuals are experiencing the effects of COVID-19 in their workplace.

In early 2019, unemployment rates actually dropped to the lowest they’d been since 1969 at 3.5%. The following months brought a stupefying spike.

Pandemic unemployment peaked at 14.7% and has dropped again recently to the current 6.7%.

Unfortunately, Federal Reserve economist, Lael Brainard, estimates that the rate for the lowest bracket of earners is still “likely above 20%.”

Oddly enough though, this is actually up again since November when there was a brief drop. This drop coincided with the initial end of an additional $600/month included for those who qualified for Pandemic Unemployment Assistance (PUA) under the CARES Act.

The Tennessee Department of Labor and Workforce Development (TDLWD) released a summation of data and stated just a few months ago, “Tennessee experienced significantly lower unemployment during the month. The preliminary, seasonally adjusted unemployment rate for November is 5.3%, a 2 percentage point drop from October’s revised rate of 7.3%. The new statistic is just 2 percentage points higher than the state’s unemployment rate one year ago in November.”

Although this rate remained lower throughout the holiday season, similar to our hints of snow, it didn’t stick.

In response to a review of the CARES Act, TDLWD reported at the end of December that they would once again institute PUA and “will provide up to 11 weeks of an additional $300 weekly benefit to eligible claimants” through March 13th, 2021.

In just one of the two weeks since an extension announcement was made and PUA went back into effect, another 21,954 Tennesseans filed new unemployment claims. So far, this is the highest number of new claims Tennessee has seen in a single week since July.

The state’s total number of claims was officially pushed past one million, reaching a staggering 1,002,908 since March 15, 2020. TDLWD paid 66,478 claims last week, totaling more than $38.8 million.

It is important to remember the correlation doesn’t guarantee causation and there are factors such as increasing COVID counts across the state that may also play a part in the spike. However, it appears that PUA has certainly motivated residents to follow through with their claims.

Only time will tell if these supportive actions taken by our government have accomplished their goals, but the recovery of a functional economy is paramount to the well-being of the nation and we will certainly continue to see movement on this front.