Unemployment in Chattanooga drops to near record low in August

Unemployment in the Chattanooga area declined in August to near-record lows, but the drop in the local jobless rate last month was due primarily to a decrease in the number of people looking for work as school resumed its fall term.

The Tennessee Department of Labor and Workforce Development said Thursday the jobless rate in the six-county Chattanooga area last month declined by a tenth of a percentage point to 3.4%. Chattanooga's jobless rate was well below the comparable nonseasonally adjusted U.S. jobless rate of 3.9%, and the number of job listings in the area at Tennessee Career centers remained more than twice as high as the number of Chattanoogans counted as unemployed and still looking for work in August, state figures show.

"The Tennessee labor market continues to display considerable strength even as the national picture remains a bit less strong," Don Bruce, director of the Boyd Center for Business and Economic Growth at the University of Tennessee, said in an emailed statement on the economy Thursday. "We still have very low unemployment and substantial numbers of unfilled jobs, and that bodes well for continued strength over the next several months."

Over the past year, Chattanooga area employers added a net 4,211 jobs in the metro area, which includes Hamilton, Marion and Sequatchie counties in Tennessee and Catoosa, Dade and Walker counties in Georgia.

(READ MORE: Gov. Lee touts economic gains in rural Tennessee)

But employment in metro Chattanooga still shrank by 3,970 workers last month from the peak level in July. Chattanooga's labor force in August, which includes workers on the job and those actively looking for work, dropped by 4,145 people.

"I am more optimistic about the economy than in the past and no longer think we will have a national recession, but the pace of job growth and the overall economy is slowing," Jeff Humphreys, director of the Selig Center for Economic Growth at the University of Georgia, said in a telephone interview Thursday. "I call it a 'slowcession' but not a technical recession."

Across the Chattanooga region, county jobless rates fell in August in 13 counties but rose in six others, according to state figures released in Tennessee and Georgia on Thursday.

The economy and jobs are still projected to grow, at least in Georgia, albeit at a slower pace than in the past few years, Humphreys said.

In Tennessee, the state's career centers listed 234,575 open jobs across the Volunteer State on Thursday, and the Chattanooga Area Chamber of Commerce was trying to fill 1,995 jobs through its ChattanoogaCalling.com service.

Unemployment in the region may rise to around 4%, "but that is still regarded by most economists as being close to full employment," where any qualified worker can find a job, Humphreys said.

(READ MORE: Chattanooga highlights economic development to state leaders)

Chattanooga's jobless rate hit an all-time low of 2.6% in April but has edged higher in the months since and could go still higher with planned factory closings in the region.

Next week, Eureka Foundry will shut down after 121 years, idling the last of its remaining 41 workers. Eureka is the eighth manufacturer to either close or announce plans for a plant closing in the Chattanooga region so far in 2023.

Last month, Newell Brands announced it is shutting down its Rubbermaid yarn mill and commercial plant in Cleveland, Tennessee, by Dec. 22. The factory closing will cut 81 jobs, according to a company notice filed with the Tennessee Department of Labor and Workforce Development.