After the worst year for job losses since the Great Depression, Tennessee and Georgia are starting the new year outperforming the country as a whole.

The jobless rate in both states fell in January to 5.1% — the lowest rate since before the pandemic hit the economy a year ago and 1.2 percentage points below the comparable U.S. unemployment rate of 6.3% at the start of 2021.

“We’re still well below the employment levels we reached before the pandemic and undoubtedly some of the jobs that were lost will not be coming back,” said Dr. Bill Fox, director of the Boyd Center for Business and Economic Research at the University of Tennessee. “But almost any way you look at it, Tennessee’s labor market picture is better than the national average. Our unemployment rate is much lower and our share of job losses is well below the U.S. as a whole.”

The Tennessee Department of Labor and Workforce Development reported Thursday that employment in the Volunteer State was down by 122,800 jobs from a year earlier, reducing the number of working Tennesseans by 2.1%. Although most of the jobs initially lost last spring have come back or displaced workers have found other jobs, employment in the leisure and hospitality industry at the start of 2021 was still down by 17%, or 59,700 jobs in Tennessee.

As bad as that was, leisure industry was hit even harder nationwide with employment down in January by 20% from a year earlier.

A household survey by the U.S. Bureau of Labor Statistics showed employment losses nationwide averaged 2.6% in the past year, or three times the 0.8% drop in job totals in Tennessee.

Since unemployment in Tennessee peaked last April at 15.6%, the state’s jobless rate has fallen by more than two thirds and Fox said he expects further gains in the economy and job market in 2021 as the pandemic eases and additional fiscal stimulus pours more money into the economy.

Jobless in January

* 5.1% – Tennessee, down from 5.6% in December

* 5.1% – Georgia, down from 5.3% in December

* 6.3% – U.S. average, down from 6.7% in December

Sources: Tennessee Department of Labor and Workforce Development, Georgia Department of Labor, U.S. Department of Labor

“Tennessee’s economy has opened up more than in some states and we expect to see continued economic improvement through 2021,” he said.

But Fox said businesses and consumers have adjusted their buying and selling habits during the pandemic and fewer jobs may be needed in the future in some retail and service industries as more shopping is done online and more meals and groceries are ordered for takeout or delivery.

In Georgia, the jobless rate also has fallen steadily since it peaked at 12.5% last April. Georgia’s unemployment rate in January was down a seasonally adjusted 0.2 percentage points from December after the state added 489,000 jobs in the past nine months.

“In our first month of 2021, we saw the unemployment rate continue to drop, signifying Georgia is pushing through this pandemic,” Georgia Labor Commissioner Mark Butler said Thursday in an announcement of the new jobless numbers. “I look forward getting more Georgians back to work, filling the more than 200,000 available job listings on EmployGeorgia.”

Despite the recent job gains, Georgia’s jobless rate at the start of the year was still 2.5 percentage points above the unemployment rate for the Peach State before the pandemic hit.

Butler said the number of jobs listed on the state’s website EmployGeorgia has nearly tripled since the beginning of the pandemic from the April 2020 listing of just 73,000 jobs. Of the over 205,000 jobs currently listed on EmployGeorgia, over half of them advertise annual salaries over $40,000, Butler said.

In Tennessee, the state’s career centers and online jobs portal, Jobs4TN.gov, listed 238,694 open positions in Tennessee on Thursday.

Nationwide, the jobless rate fell by 0.4 percentage points in January to 6.3%.But there are about still 9.5 million fewer jobs than there were a year ago. More than 4 million people have dropped out of the labor force and are not counted in the unemployment rate as being jobless.

“We’re still not yet at the phase of the recovery where we’re seeing the floodgates open up,” said Daniel Zhao, senior economist with the career site Glassdoor. “I don’t think it’s quite fair to call what we’ve done so far ‘reopening’ because there’s still a lot of people who are out of work and a lot of businesses that are closed.”

Contact Dave Flessner at [email protected] or at 423-757-6340.