As the supplemental federal jobless benefits began to run out last week, Tennessee reduced what it paid the typical unemployed worker getting jobless benefits last week by nearly $200 and the decline is expected to continue in coming weeks unless a new stimulus package is agreed to in the U.S. Congress.
The number of new jobless claims filed last week fell in Tennessee to the lowest level since early March, but the level remained elevated from a year ago.
The state paid jobless benefits last week to 267,711 claimants who got an average of $735.48 in benefits, including some back payments for previous weeks' of eligibility, according to figures provided by the Tennessee Department of Labor and Workforce Development. A week earlier, Tennessee paid an average of $932.85 in jobless benefits to 248,546 claimants.
Tennessee pays only up to $275 a week in state unemployment benefits, but the federal government had been providing an extra $600 a week in benefits through the end of July and the state is still distributing some of the federal supplemental benefits.
But many jobless workers are beginning to get a significant drop in their weekly unemployment checks.
Michelle Meyer, an economist at Bank of America Merrill Lynch, said the loss of the additional aid will reduce Americans' incomes by $18 billion a week.
"That's a big hit to purchasing power," she said.
The U.S. Department of Labor said Thursday number of Americans applying for unemployment dropped below 1 million last week for the first time since the coronavirus outbreak took hold in the U.S. five months ago, but layoffs are still running extraordinarily high.
Applications for jobless benefits nationwide declined to 963,000, the second straight drop, from 1.2 million the previous week, the government said Thursday. In Tennessee, new claims for unemployment benefits fell from 25,794 in the last week of July to 19,461 last week - the lowest weekly total in 19 weeks.
That signals layoffs are slowing, though the weekly figure still far exceeds the pre-outbreak record set in 1982.
Nationwide, fewer people are collecting unemployment, a sign that some employers are hiring. The total declined last week to 15.5 million, from 16.1 million the previous week.
"Another larger-than-expected decline in jobless claims suggests that the jobs recovery is regaining some momentum, but much labor market progress remains to be done," said Lydia Boussour, senior economist at Oxford Economics.
Hiring is believed to have slowed since the spring, when states reopened and millions of workers at bars, restaurants and stores were rehired. The job gain in August will probably fall short of the 1.8 million added in July, analysts say.
For months, on top of their state benefit, unemployed Americans also collected the $600 a week in federal jobless aid. But that expired at the end of July, and negotiations in Congress to extend it, probably at a lower level, have collapsed in rancor.
Last week, President Donald Trump issued an executive order that would provide $300 a week to replace the expired $600. But experts say it could take weeks for the states to reprogram their computers and process and dispense the payments.
In addition to people who applied last week for state benefits, nearly 489,000 others sought jobless aid under a new federal program that has made self-employed and gig workers eligible for the first time. That figure isn't adjusted for seasonal trends, so it is reported separately.
Counting those receiving aid under the new program would bring to 28.2 million - roughly 18% of the U.S. workforce - the number of Americans now receiving some form of unemployment benefits.