Unemployment reached new highs in Memphis and Shelby County in July as they continued to post the worst jobless numbers in Tennessee.

The Memphis rate climbed 1.6 percentage points to 16.9% from a revised 15.3% in June, according to preliminary numbers released by the state Thursday, Aug. 27. A year ago Memphis unemployment was 5.1%.

Shelby County’s rate increased to 14.4% from 13.1% in June, and the three-state Memphis metropolitan area stood at 13%, up from 11.9%.

The numbers were the highest since the COVID-19 pandemic began in March.

Tennessee unemployment to increase to nearly $600 per week

Jobless data from the Tennessee Department of Labor and Workforce Development showed 51,052 people without jobs in Memphis, 63,632 in Shelby County and 81,971 in the metro area.

Among suburban communities, the state reported unemployment rates of 5.8% in Germantown, up from 5.7%; 6% in Collierville, unchanged from June; and 7.7% in Bartlett, up from 7.5%.

The deteriorating local job picture contrasted with a slight improvement across Tennessee and the nation. Tennessee unemployment ticked down for a third consecutive month, to 9.5%, and the U.S. improved to 10.2%.

Tennessee unemployment highest in 37 years in April

The unemployment increase comes at a time when logistics employers in the Memphis area are hiring workers to handle a continuing surge in e-commerce that’s expected to last through the holiday season.

Ebbs and flows in the labor market explain the potentially contradictory fact that unemployment is increasing at the same time new jobs are coming available.

“Memphis can have both rising unemployment and job creation at the same time,” said John Gnuschke, director of the Sparks Bureau of Business and Economic Research at the University of Memphis.

“Because of the COVID depression and tremendously damaging loss of jobs in Memphis, many people have been discouraged and simply stopped looking for work. Dropping in and out of the labor force is a response to economic conditions,” he said.

“As the labor market improves, as evidenced by the hiring and wage increases at FedEx and other local employers, people decide to seek jobs because they are being created. With unemployment rates already high, the growth in the labor force offsets the job gains. Unemployment rates rise at the same time job opportunities increase,” Gnuschke said.

FedEx recently instituted a pay premium program for its FedEx Express world hub at Memphis International Airport, where it’s chronically understaffed.

FedEx sets pay premium for Memphis hub

FedEx is seeking to fill 500 permanent, part-time jobs in a hiring event for Memphis hub workers from 8 a.m. to 5 p.m. Saturday, Aug. 29, at 2874 Business Park Drive, Building D.

FedEx says the pay premium program and an October pay increase will combine to increase pay for Memphis hub workers to $15 an hour for hours worked this fall. Published starting pay for hub jobs is less than $15.

Part-time workers at the hub are guaranteed at least 17.5 hours a week.

Home goods merchandiser Williams-Sonoma said in mid-August it was hiring up to 200 full-time workers immediately and that it might need as many as 3,000 seasonal workers for the holiday peak season at Memphis-area facilities. Starting pay was listed at $14 an hour.

Williams-Sonoma hiring 200 now, maybe 3,000 for peak

Amazon, which has a companywide minimum wage of $15 an hour, said in late July it was hiring more than 500 full-time workers for a new large-item fulfillment center in Olive Branch.

Amazon opens fulfillment center for larger items in Olive Branch

The Tennessee labor department said its workforce development website at jobs4tn.gov contained more than 200,000 active job listings. There were more than 1,300 positions listed in the Memphis area.

The state reported 300,071 unemployed in July.

Along with lower unemployment in other parts of the state comes tighter labor markets, which could give Memphis the edge for some types of employers.

“The economy of Memphis has typically lagged behind most of the other cities in Tennessee. Tighter labor markets in Nashville are a blessing and not,” Gnuschke said.

“The unemployment rates will be lower in Nashville but fewer workers are available to respond to the needs of employers. If you need workers, expand where workers are available: Memphis,” he said.