Jobless rate drops, but wages remain stagnant in Tennessee

Jobless rate drops, but wages remain stagnant in Tennessee

May 16th, 2014 by Dave Flessner in Business Around the Region

By the numbers

* 6.3 percent - unemployment rate in U.S. and Tennessee

* 7 percent - Georgia unemployment rate

* 48,000 - Job additions in past year in Tennessee

* 75,700 - Job additions in past year in Georgia

* $728.08 - Average weekly pay in Tennessee, up $1.60 a week from a year ago

Sources: Tennessee Department of Labor and Workforce Development and Georgia Department of Labor

Unemployment in Tennessee fell to the lowest level in nearly six years last month and, for the first time since 2011, matched the national jobless rate.

Tennessee added 48,000 jobs in the past year to cut the state's unemployment rate in April to 6.3 percent. But much of the decline in the jobless rate last month came from a decline in the number of Tennesseans in the labor force, not just from job additions.

"We're seeing many Baby boomers retire and there are still many discouraged workers giving up looking for work," said William Fox, director of the Center for Business and Economic Research at the University of Tennessee. "But there is still a clear and consistent pattern of growth in the employment market this year and we expect that growth to continue."

In neighboring Georgia, the unemployment rate in April was unchanged at 7 percent.

Both Tennessee and Georgia have shown significant drops in joblessness from a year ago when unemployment was 8.3 percent in both states.

"We had very strong job growth in April, as our employers created 41,300 new jobs, which is the largest March to April increase since 2005," Georgia Labor Commissioner Mark Butler said. "And, to make things even better, more job seekers are entering the labor force and getting hired. This is a stark contrast to what we're seeing nationally with hundreds of thousands of people leaving the labor force."

Georgia lost a net 400 jobs in manufacturing during April, due largely to temporary layoffs in poultry processing. But the Peach State showed job gains in nearly all other sectors.

In Northwest Georgia, hiring by Shaw Industries, Mohawk Industries, GE Roper and other major employers should continue to cut the jobless rate through this spring.

In Tennessee, employment over the past year grew the most in construction, up by 4.9 percent since April 2013, and in leisure and hospitality industries, which were up by 4.4 percent over the past 12 months. Durable manufacturing was also up by a healthy 2.8 percent in the past year.

"Before the recession, we saw a service industry led employment market, but we're seeing gains now in jobs across many sectors," Fox said.

But even with unemployment at the lowest level since the fall of 2008, the labor market appears to have enough slack to prevent workers from commanding bigger pay increases. In April, the average Tennessean earned $728.08 in weekly pay, or a mere 0.2 percent more than a year ago.

"One of the best indications of whether there are significant shortages in labor is what happens with wages," Fox said. "What we haven't seen yet is any upward pressure on wage rates and what that suggests is we still have some slack in the labor market."

Contact Dave Flessner at or at 757-6340