Chattanooga area jobless rate remains above U.S. average

Chattanooga area jobless rate remains above U.S. average

September 27th, 2013 by Dave Flessner in Business Around the Region
Illustration by Laura McNutt /Times Free Press.

After 50 weeks working on the loading dock at the Volkswagen plant, Justin Secall thought he was building a career when it abruptly ended in July.

"There was no warning, but when I went to swipe my badge to get in the plant that morning it wouldn't work and I was out of a job," the 25-year-old laborer said Thursday while looking for another job at the Tennessee Career Center. "I loved that job, but I've got to move on."

Secall was among 500 temporary workers who lost their jobs with Team 3 Logistics and other temp agencies at the VW plant in Chattanooga this spring and summer after VW sales fell short of initial projections. The displaced VW worker says he is getting his GED certificate and planning to enroll in the police academy.

Despite statewide and nationwide job gains during August, employment declined last month in metropolitan Chattanooga and the local jobless rate remained above both the year-ago level and the comparable U.S. rate, according to August employment figures released Thursday. The Tennessee Department of Labor and Workforce Development reported that Secall was among 2,590 workers who lost their jobs or went back to school in August in the six-county Chattanooga region.

Last month's jobless rate in metro Chattanooga was down 0.2 percent from July to 8 percent, but remained 0.2 percent above the year-ago level of 7.8 percent. Nationwide, the comparable jobless rate in August was 7.3 percent.

Chattanooga was hit this summer the loss of nearly 500 workers at VW temp agencies and another 300 workers previously employed at businesses controlled by Chattanooga Internet payday lender Carey Brown. Brown shuttered most of his business empire after regulators directed banks to stop clearing drafts on consumer checking accounts for what New York bank supervisors said were improper payday loans.

The jobless rate fell across most counties in Southeast Tennessee and Northwest Georgia during August. But much of those gains was due to the seasonal restart of school, which opened up more education jobs and cut the size of the workforce from the July high.

"There are jobs, but it's still tough to get hired," said Efrem Leslie, an 18-year-old who has been looking for work for nearly two years.

The improving economy is adding jobs, however, in one of the hardest hit metro areas in the tri-state region.

Unemployment in the Dalton area plunged in August to one of its lowest levels in five years as carpet mills resumed hiring as the housing recovery gained momentum. The Georgia Department of Labor said the jobless rate in metro Dalton fell from 12.3 percent in July to 10.3 percent last month.

The August unemployment rate in metro Dalton was the lowest since April and the second lowest monthly rate since the Great Recession hit the Carpet Capital in the fall of 2008. The drop reflected both the addition of 300 more jobs in the area last month and the decline of 316 persons from the local labor force.

The non-seasonally adjusted unemployment in Dalton peaked at 13.6 percent three years ago and was at 11.4 percent in August 2012.

Dalton's jobless rate last month remained well above Georgia's statewide average of 8.7 percent. But Dalton's rate should continue to decline this fall. The Georgia Department of Labor is listing dozens of job openings in North Georgia by carpet makers Mohawk Industries and Shaw Industries. Engineered Floors also is adding hundreds of workers to staff two new carpet mills in the region.

Nationwide, the U.S. Department of Labor reported Thursday that the number of people seeking unemployment benefits sunk to its lowest point in six years. A survey of service companies found that they added jobs last month at their fastest pace in six months. And more small businesses say they plan to hire than at any point since the recession began.

All of which is prompting some economists to forecast a healthier job gain in September than the economy has produced in recent months.

"If you put all that together, it suggests that there has been an improvement in job market conditions," said Paul Ashworth, an economist at Capital Economics.

Ashworth predicts that U.S. employers will have added 220,000 jobs in September. That would be the biggest gain in nearly seven months and would mark a sharp reversal from the summer. Job growth has averaged just 155,000 a month since April, down from 205,000 in the first four months of the year.

The Associated Press contributed to this report

Contact Dave Flessner at or at 757-6340.