In Tennessee, 39,096 individuals filed unemployment claims in the week ending March 21, a 1,300 percent increase from the prior week, underscoring the massive economic damage from the COVID-19 outbreak.

In the prior week, Tennessee saw just more than 2,700 people file claims, according to the U.S. Department of Labor. The state's growth rate exceeds the national increase of more than 1,000 percent, with claims climbing to 3.28 million from 282,000.

COVID-19 has decimated the state's tourism industry this spring as visitors are staying home to help curb the spread of the virus. That impact has spread to other sectors as well as the flow of money has stalled and consumers are encouraged to stay home.

"The impact of this virus on that particular industry, the segment of that industry, is overwhelming," Gov. Bill Lee said Thursday about Tennessee hospitality and entertainment sectors. "We have thousands and thousands of workers losing their jobs everyday. That has a powerfully negative impact on the lives of Tennesseans."

The data points released Thursday only go through March 21. Nashville Mayor John Cooper issued a Safe at Home Order closing non-essential businesses and Lee limited operations at restaurants, bars and gyms, on March 22, indicating much higher claim numbers could follow.

The loss in jobs marks a stark departure from the thriving economy Tennessee leaders were pointing to just weeks ago. The state reported an unemployment rate of 3.3 percent for January, near the record low of 3.2 percent reached last year.

Nationally, the number of unemployment claims is the highest level of weekly claims filed on record. In Tennessee, the number of unemployment claims is the third highest on record, with data going back to 1987.

"What we are getting is a dramatic, unprecedented number of layoffs associated with the coronavirus," said University of Tennessee economist Bill Fox. "That will be followed up with layoffs associated with a recession."

In Tennessee, the largest number of unemployment claims filed in the week ending March 21 were in Northern Middle Tennessee, with nearly 17,000 people seeking benefits. In East Tennessee, there were more than 6,800 claims and in the Greater Memphis area, there were more than 4,300.

Through Wednesday of this week, 10 Tennessee companies filed notices with the state that they would be collectively laying off 1,373 workers. In Tennessee, companies cutting significant numbers of jobs are required to give 60 days notice if they have more than 50 workers.

More:Initial jobless claims surged to record 3.3M last week as coronavirus takes heavy toll on economy

Hotel management company Vision Hospitality in Chattanooga is letting go of more than 750 workers, according to state filings. Platinum Companies, a Nashville hospitality development firm, is cutting more than 120 positions.

Old Town Trolley Tours, which takes tourists through the streets of Nashville, the Old Spaghetti Factory in downtown Nashville, the Tennessee Aquarium in Chattanooga and Holiday Inn Downtown Knoxville are among those announcing significant job cuts.

Lee announced a new public private partnership to help match Tennesseans who have lost work with employers, such as groceries, undergoing a surge in demand because of the COVID-19 outbreak.

The "Tennessee Talent Exchange" is available at Jobs4TN.gov and it is meant to streamline the process for posting jobs and finding jobs.

The labor department is tripling the number of people working on unemployment claims, shifting about 200 people working in workforce development centers to help process claim applications. Employees are processing the influx of claims, mostly from home, and the centers extended their hours to 7 a.m. to 7 p.m.

"As a Department, we are shifting resources to align with our greatest need,” said Commissioner Jeff McCord, who leads the state labor department. “The changes we are making will go a long way in keeping up with the demand created.”

McCord said the state has upgraded the system for filing to increase claims and payment processing speeds.

The unemployment claims do not reflect Tennesseans who are self-employed, many of whom have lost their sources of income but are not eligible for unemployment claims. For those workers to receive help through Disaster Unemployment Assistance, President Donald Trump would need to declare Tennessee a disaster area, according to state labor officials.

Lee said Thursday he anticipates the number of claims in Tennessee will grow in the coming weeks and that the state could receive between $2 billion and $3 billion from the federal government to help support small businesses and workers who have lost jobs.

"When you consider unemployment claims of 40,000 a week, those are big numbers," Lee said. "There are huge economic losses associated with what is happening across this state."

Lee called on Tennesseans to support the economy by following health recommendations on preventing the spread of the virus.

"There are profound implications to the spread of this virus, which is why it is so important that each of us do our part to look beyond when this virus is ravaging this state at its highest point," Lee said.

Fox said the depth of the economic slump depends on how consumers respond to the federal government's stimulus programs and how many companies are able to keep people on payrolls even as business declines or comes to a halt. Any federal stimulus package passed now to stem the crisis will likely need to be followed up later with another package to actually stimulate the economy, he said.

A recession is likely to last through the remainder of the year and possibly into next year as the impact on the hospitality, retail and manufacturing sector affects other areas.

"You are getting this fall off a cliff in certain industries," Fox said. "In a month or two, if we haven’t been able to revive demand in the economy, it will be felt much more broadly."

Automakers have been hoping for pent-up demand once people are able to return to work, but under the cloud of a recession, people will not have the buying power or confidence to make big purchases, Fox said.

As businesses navigate the uncertainty and seek to maintain operations, Stacey Dennis, human resources specialist at Insperity in Nashville, encouraged employers to keep perspective on the long term when it comes to their employees — whether they are managing remote work with kids at home or trying to keep the lights on.

"What's more important right now is for businesses to think about what kind of employer do they want to be," Dennis said. "When this is all done in six, 12 months, two years from now, whenever this is all done, and they are looking back on it, what do they want their employees to say about them? Do they want them to say, 'They were a really caring employer who worked with me in this time of need,' or 'They only focused on the bottom line?'"

Joel Ebert contributed to this report. Reach Jamie McGee at 615-310-1873 and on Twitter @JamieMcGee_.