Tennessee: 4.5 percent last month, down 0.4 percent from February
Georgia: 5.5 percent last month, up 0.1 percent from February
U.S. average: 5.0 percent last month, up 0.1 percent from February
Sources: U.S. Department of Labor, Georgia Department of Labor and Tennessee Department of Labor and Workforce Development
Unemployment in Tennessee dropped to the lowest level in nearly nine years last month as employers across the Volunteer State added jobs at twice the national pace over the past year.
The Tennessee Department of Labor and Workforce Development said Thursday that the state's jobless rate in March fell by four tenths of a percentage point to 4.5 percent — the lowest seasonally-adjusted rate in Tennessee since June 2007.
According to household surveys of workers, Tennessee added 122,300 jobs in the past year. The 4.3 percent gain in employment in Tennessee over the past 12 months was more than twice the 2.1 percent gain in jobs recorded nationwide, according to the U.S. Bureau of Labor Statistics.
Tennessee's jobless rate fell last month significantly below the U.S. rate of 5.0 percent, marking the biggest relative advantage for Tennessee in its unemployment rate compared with the U.S. as a whole since the Great Recession ended more than five years ago.
"Job growth in Tennessee is very strong right now, and that is born out by the strong sales tax growth we are also seeing across the state," said Dr. Bill Fox, director of the Center for Business and Economic Research at the University of Tennessee. "The past three years have shown some of the fastest rates of sales tax growth relative to the economy that we've seen in 30 years in Tennessee. In the fourth quarter of 2015, we had the fastest sales tax growth rate in the country."
Fox said taxable sales are up 7 percent in the current fiscal year over last year in an economy with modest to virtually no inflation.
The plunge in energy costs and usage has hurt oil, gas and coal producing states. But Tennessee has relatively little coal or oil production anymore and consumers have benefited by cheaper gas, utility and transportation costs. The state's top two industries — agriculture and tourism — have been boosted by lower costs for farming and greater travel by tourists. Nashville's health care-based economy also is leading the state as medical spending continues to rise, Fox said, and the state's growing automotive industry is benefiting by rising car and truck sales.
"We have a lot of good things going on in Tennessee right now," Fox said.
Over the past year, Tennessee's unemployment rate decreased from 6 percent to 4.5 percent while the national rate declined from 5.5 percent to 5 percent.
The drop in unemployment is beginning to create a tougher hiring market for some employers. A new survey of 16 Chattanooga area employers conducted for the Times Free Press by the Chattanooga chapter of the Society of Human Resource Managers found that one in four are now seeing fewer job applicants than they did a year ago and report having a harder time filling vacancies. Nearly 19 percent said they are having to search elsewhere to fill job vacancies.
"We're getting closer to full employment and that is making the labor market tighter and should push up wages over time, especially in harder to fill occupations," Fox said.
But so far, wage growth remains muted. The Tennessee labor department said the average manufacturing wage in Tennessee last month was $17.48 an hour, up only 1.6 percent from a year ago and nearly 30 percent below the U.S. average hourly wage rate of $24.87.
Despite the drop in the unemployment rate in Tennessee, neighboring Georgia recorded a slight rise in the March jobless rate. The Georgia Department of Labor said the seasonally adjusted unemployment rate in the Peach State during March was 5.5 percent, up one-tenth of a percentage point from 5.4 percent in February. The rate was 6.2 percent in March 2015.
"Even though the rate went up slightly, March was really a good month for Georgia's labor market," Georgia Labor Commissioner Mark Butler said in a report released Thursday. "Our employers created 12,600 jobs, which is much stronger than the average for the same period over the last three years, and they had fewer layoffs. Our labor force grew by 21,570, bringing the total growth this year to more than 55,000."
Butler said the number of people seeking jobs has grown faster than employment, causing the monthly rate increase in Georgia. But over the past year, Georgia has added a healthy 130,000 jobs.
"We continue to out pace the rest of the nation," Butler said.
Georgia's March-to-March job growth rate was 3.1 percent, compared to the national rate of 2 percent.