Unemployment declines in Chattanooga as employers add 3,268 jobs in past year

Unemployment in the Chattanooga area fell last month to its lowest level since last spring as many employers staffed up for the Christmas sales rush.

Despite higher interest rates and the shutdown of a half dozen area manufacturing plants in the region during the past year, local employers still added 3,268 more workers to their payrolls in metropolitan Chattanooga over the past year and kept unemployment in Chattanooga below both the state and national averages, according to employment figures released Thursday.

The Tennessee Department of Labor & Workforce Development said the nonseasonally adjusted unemployment rate in the six-county Chattanooga metro area declined to 3.2% in November from 3.5% the previous month. Similar declines were recorded in metro Cleveland, Tennessee, where the jobless rate fell to 3.5%, and in metro Dalton, where unemployment declined in November to 3.4%.

University of Tennessee Economist Don Bruce said the employment market has remained strong despite efforts this year by the Federal Reserve Board to slow the pace of economic growth and cool inflation.

"While the numbers remain strong, it is good to see things tapering towards a more stable and sustainable path," Bruce said in an emailed statement. "These latest data provide confidence that monetary policy is working to slow the economy a bit without setting off a full-blown recession. Tennessee's labor market remains very tight and suggests ongoing slower but positive economic growth."

Statewide, the seasonally adjusted unemployment rate in November rose to a nine-month high after employers in the state shed 4,400 jobs last month. But employment was still up by 19,500 workers during the past 12 months. That kept unemployment unchanged from its level a year ago and still at historically low levels heading into the Christmas holidays.

(READ MORE: Tennessee forecast to outpeform the U.S. economy in 2024)

In Georgia, all of the state's regional areas saw a decrease in unemployment in November, traditionally a busy hiring month ahead of the Christmas holidays.

"As we prepare to ring in a new year, Georgia's future is bright," state Labor Commissioner Bruce Thompson said in a statement Thursday. "With holiday shopping and retail kicking back up, Georgia's unemployment rates are dropping faster than holiday deals. Coupled with a soaring job market and a workforce ready to take on limitless opportunities, Georgia is well on the road to success."

(READ MORE: Georgia growth to slow, but no recession expected in new year)

The low jobless rate offers plenty of employment opportunities for workers, but the job market remains a challenge for some employers, especially for those trying to expand and needing workers for skills in short supply. Although hiring and jobs traditionally decline at some retailers following the busy Christmas holiday buying season, state career centers still listed 217,747 open jobs across Tennessee on the jobs4tn website Thursday, or nearly twice as many as the number of Tennesseans who were counted as unemployed and looking for work last month.

With more open jobs than workers qualified for those jobs in Tennessee, workers are also more apt to change jobs. A study by the U.S. Bureau of Labor Statistics in October showed Tennessee had the fourth-highest quit rate among workers in any state, behind only Alaska, Montana and Delaware. In October, 3.2% of workers in Tennessee resigned from their current jobs, or one-third more than the U.S. quit rate of 2.4%.

In the Chattanooga area, unemployment was lowest in the three Georgia counties of metro Chattanooga — Catoosa, Dade and Walker — and was also below the U.S. nonseasonally adjusted jobless rate of 3.5% in both Hamilton and Whitfield counties.

But unemployment was higher than the U.S. average in most rural counties of Southeast Tennessee. Bledsoe County had the third-highest jobless rate in the state, and Meigs County had the fourth highest among all 95 counties in Tennessee.

Across Tennessee, 92 of the 95 counties had jobless rates below 5%, and among Georgia's 159 counties, three had jobless rates above 5% and none of those were in Northwest Georgia.

Unemployment has remained at historically low levels in the Chattanooga area despite the shut down of a handful of manufacturing plants in the area during 2023.

Eureka Foundry, National Seating & Mobility and Volkswagen suppliers ThyssenKrupp and Grupo Antolina have closed their plants in Chattanooga in the past year. Beiersdorf Manufacturing also shut down its plant in Cleveland, while Shaw Industries closed its mill in Decatur, Tennessee, according to WARN notices.

The "federal law known as the Worker Adjustment and Retraining Notification Act, or WARN Act, offers protection to workers, their families and communities by requiring employers to provide notice 60 days in advance of plant closings, mass layoffs and/or sale of a business," according to the Tennessee Department of Labor & Workforce Development.

T-Mobile cut 127 jobs last month at its Chattanooga call center, and the RubberMaid Yarn Mill said it plans to close its Cleveland facility by the end of the year, cutting 81 jobs.

Collectively, those plant closings and cutbacks eliminated more than 1,000 job in the region, according to WARN notices filed with the Tennessee Department of Labor & Workforce Development.

But such job losses have been more than offset by new businesses starting or entering the local market along with expansions of existing industry, Bruce said.

Nationwide, the U.S. Department of Labor said Thursday more Americans applied for unemployment benefits last week, but not enough to raise concern about the labor market or broader economy.

Jobless claims rose to 218,000 for the week ending Dec. 23, an increase of 12,000 from the previous week, the Labor Department said. The four-week average of claims, which smooths out week-to-week ups and downs, fell by 250 to 212,000.

Overall, 1.88 million Americans were collecting jobless benefits during the week that ended Dec. 16, an increase of 14,000 from the previous week. Labor officials said while hiring has slowed, the job market remains healthy.

The U.S. unemployment rate has come in below 4% for 22 straight months, the longest such streak since the 1960s.

The Associated Press contributed to this report.

Contact Dave Flessner at dflessner@timesfreepress.com or 423-757-6340.