Unemployment dropped to its lowest rate in history in both Tennessee and Georgia last month as employers continued to scramble to fill more than four times as many job openings as there are available workers, according to new state employment figures released Thursday.
The Tennessee Department of Labor and Workforce Development said employers across the Volunteer State added 124,800 jobs over the past 12 months to cut Tennessee's jobless rate in March to 3.2%, down two-tenths of a percentage point from the previous month to beat the previous all-time low for unemployment set three years ago before the pandemic slowed the economy.
In Georgia, the jobless rate fell even lower to 3.1%, also an all-time low, after Georgia employers added 234,400 jobs during the past year.
Despite rising inflation, interest rates and supply chain problems caused by the war in Ukraine, the economy is continuing to grow and add jobs even as more workers continue to get back on the job following two years of pandemic challenges.
"The economy still continues to grow and add jobs, even faster than the growth in the labor force," Bill Fox, director of the Boyd Center for Business and Economic Research at the University of Tennessee said in a phone interview. "It should remain a tight labor market for the foreseeable future, and the lack of workers could limit growth in some areas."
Fox said he expects economic growth this year to be only about half the robust 5.7% gain in GDP recorded for the U.S. as a whole last year due to higher interest rates from the Federal Reserve's tighter monetary policy designed to slow inflation, which is now running at a 41-year high, and the tight labor market, which is making hiring more difficult for nearly all employers.
"But for all the concerns about inflation and supply chain problems, household balance sheets are still in relatively good shape, and wage gains should help continue to propel the economy," Fox said.
Jobless in March
* Georgia, 3.1.%, down from 3.2% in February* Tennessee, 3.2%, down from 3.4% in February* United States, 3.6%, down from 3.8%Sources: Tennessee Department of Labor and Workforce Development, Georgia Department of Labor and U.S. Bureau of Labor Statistics
Although wages aren't growing as fast as inflation for many workers, most hourly and production jobs in high demand are seeing their biggest wage increases in decades.
"Wages and benefits are having to be increased because of a very tight labor market, and we are now seeing the highest number of Georgians ever employed and participating in the workforce," Georgia Labor Commissioner Mark Butler said in his monthly unemployment report released Thursday. "Many of the sectors that weathered significant hardships during the pandemic are now having to offer higher wages and better benefits packages to get employees into open positions enabling them to do business."
In the 12 months ended in February, the average wage gain in Georgia was more than 9%, with weekly wages in the leisure and hospitality industry up 20.4% and wages in health care jobs up 10.6% compared to a year ago, according to the state employment report.
In Tennessee, the average weekly manufacturing wage jumped above $1,000, or more than $52,000 a year, for the first time, in March. In the 12 months ended in February, weekly wages for manufacturing workers in Tennessee grew by an average of 13.4%, the biggest gain among the 10 states in the Southeast, as workers' hourly pay was raised and most employees worked more overtime.
Average manufacturing wages in Tennessee remained 7.3% below the U.S. average, but the historic wage gap for most Tennessee workers narrowed some last month.
The decrease in unemployment last month allowed Tennessee to eclipse the previous all-time low unemployment rate of 3.3%, recorded in August 2019.
Tennessee reached the historic low just 23 months after it marked its all-time highest unemployment rate of 15.9% in April 2020, during the height of pandemic-related business closures across the state.
Over the past year, employment in Tennessee grew the fastest in leisure and hospitality, which was up 14.7%; food services, which added 12.9% more jobs; and jobs in construction and mining, which grew by 6.4%.
On Thursday, Tennessee career centers across the state reported 466,075 job openings on the state's website, www.jobs4tn.gov. The number of open jobs was more than four times as many as the 102,471 Tennesseans counted as unemployed but still looking for work last month.
Contact Dave Flessner at dflessner@timesfreepress.com or at 423-757-6340. Follow him on Twitter @dflessner1.