Matt Murray

Like the saddles she helped stitch together for 30 years at Big Horn Inc., Billie Jo Nation thought she was sitting pretty to ride out her career until retirement.

But shortly before quitting time on a Friday afternoon last month, Mrs. Nation and 89 other employees learned their careers in the saddle-making industry were over with the shutdown of Chattanooga’s Big Horn.

“I need to find another job, but right now it’s really difficult because there already are so many people out of work and very few businesses seem to be hiring,” the 55-year-old Jasper woman said. “I never thought I’d be out trying to find a job again, but I guess I’ll have to keep looking.”

File Photo by Dan Henry More than 1,800 jobs have been lost from major layoffs in Southeast Tennessee so far this year, according to the Tennessee Department of Labor and Workforce Development. Such layoffs helped boost Tennessee’s unemployment rate in September to the highest level in more than 17 years.

Mrs. Nation is among more than 15,000 unemployed individuals in metropolitan Chattanooga who are looking for work. Big Horn is one of 17 businesses in Southeast Tennessee that have made major employment cuts or closed their doors this year in response to the slowing economy, according to required job termination notifications filed with the Tennessee Department of Labor and Workforce Development.

Collectively, more than 1,800 jobs in Southeast Tennessee have been lost directly from such major layoff notices, and hundreds of other support and related jobs also are expected to be cut.

As a result, Tennessee’s jobless rate in September rose to its highest level in more than 16 years, and economists predict unemployment in the Volunteer State will continue to increase through next fall in response to this year’s drop in home values, stock prices and consumer confidence.

“The problem is that we are seeing no signs yet of the economy bottoming out,” said Matt Murray, associate director of the Center for Business and Economic Research at the University of Tennessee in Knoxville. “All of the measurements of economic activity are performing very poorly, and they don’t seem to be turning around.”

ECONOMIC PROBLEMS

Automobile sales are expected to hit a 25-year low this year, and home sales are the lowest since the early 1990s, Dr. Murray said.

The state’s jobless rate of 6.9 percent in September, not adjusted for seasonal factors, is the highest since early 1992. Although the jobless rate in Tennessee during September still was only about half the peak level of 12.4 percent reached in the recession in 1982, the state’s unemployment rate has climbed 2.3 percent in the past year alone, figures show.

Eventually, Dr. Murray predicts, lower energy costs and interest rates combined with government stimulus programs and pent-up consumer demand will revive Tennessee’s economy. But much of that strength may not come until late next year, he said.

Southeast Tennessee will be aided in the next year as workers begin to be hired for the 2,000-employee Volkswagen assembly plant at the Enterprise South industrial park, the 350-employee expansion of Alstom Power near downtown Chattanooga and the construction of a second reactor at the Watts Bar Nuclear Plant near Spring City, which will employ more than 2,000 construction workers.

But for now, local staffing businesses on the front line of the battle for jobs are feeling the pinch.

“We’re confident it will get better in six to nine months, but employers are very cautious right now,” said Al Gainey, owner of Spherion Staffing, which operates offices in Chattanooga, Asheville, N.C., Atlanta and Gainesville, Ga. “In my 12 years in this business, I’ve never seen a market this soft. There are plenty of folks looking for jobs and very few businesses hiring.”

Glyn Hodges, owner of ATS Staffing Services and Hire Level, said businesses are cutting both their contingent and full-time staffers in the current downturn.

“We’re preparing for a year or two before we really see an upsurge again,” said Mr. Hodges, a 24-year industry veteran who previously served as president of the Tennessee Staffing Association. “We’re all betting on Volkswagen in Chattanooga, but that’s a ways off before they do a lot of major hiring.”