Matt Murray, associate director of the Center for Business and Economic Reasearch of the University of Tennessee speaks at the Chattanooga Manufacturers Association annual meeting at the Chattanooga Convention Center Wednesday.Despite an increase in the local jobless rate last month, Tennessee’s economy should continue to improve this year and next, keeping the jobless rate below 5 percent and giving most workers their biggest wage increases in years.
“We saw as 2016 closed out, wage rates rising at a faster pace, and I would expect that to continue for at least the next couple of years,” said Matt Murray, associate director of the Boyd Center for Business and Economic Research at the University of Tennessee, which released its annual economic forecast Thursday. “Tight labor markets are going to contribute to further rises in average hourly earnings. Wages have been stagnant since the Great Recession, so these increases should be really good news for American workers.”
Murray and other UT economists predict employment in Tennessee will grow another 1.4 percent this year and 1.2 percent next year. Although slower than the job growth in 2016, the employment gains this year should keep Tennessee’s unemployment rate to an average of 4.8 percent in 2017 and 4.6 percent next year, even as the population of the state continues to grow.
Murray said higher interest rates, inflation and exchange rates could limit some growth in the next year.
“But I don’t see anything short of some unexpected shock that would derail another year of growth,” Murray said.