Tennessee jobless rate rises to 3.4 percent but remains near historic lows

Job growth in state is nearly double U.S. average

Unemployment in Tennessee edged higher last month but remained near the record low levels reached last fall as employment in the Volunteer State continued to grow nearly twice the rate of the country as a whole.

The Tennessee Department of Labor and Workforce Development said today that the state's jobless rate in February averaged 3.4 percent, up from 3.3 percent in January but below the comparable U.S. rate of 4.1 percent last month.

Over the past 12 months, Tennessee's seasonally adjusted unemployment rate decreased a full percentage point from 4.4 percent to 3.4 percent after the state's employers added a net 76,900 more jobs. Tennessee's employment in the past year grew by 2.5 percent, nearly double the U.S. growth rate of 1.3 percent.

"Our consistent near-record low unemployment rate demonstrates that Tennessee's fiscal conservative policies foster an environment where businesses can thrive and create jobs," Gov. Bill Haslam said in a statement today. "As we continue to invest in our workforce though the Tennessee Promise and Tennessee Reconnect programs, Tennessee will lead in high-quality job growth."

In the past year, employment growth in Tennessee was greatest in leisure and hospitality, which added 16,600 jobs to grow at a robust 5.1 percent.

Durable goods manufacturing, information and federal government employment combined lost 1,500 jobs in the past year, dropping by 0.2 percent in the 12 months ended in February 2018.

With unemployment below the U.S. average, SunTrust Market President Jim Vaughn said many employers say their biggest problem today is finding enough qualified workers.

"Our economy locally is strong so it is a challenge for many employers to recruit and retain highly qualified workers in many fields," Vaughn said.

According to the annual Business Pulse Survey by SunTrust Banks, nearly 50 percent of companies say attracting and retaining employees is their top challenge in 2018.

Among small businesses surveyed by SunTrust, 79 percent said they are optimistic about their fiscal health and growth. But they cite employee morale (59 percent), a shortage of skilled labor (54 percent) and higher than average turnover (53 percent) as factors that could impact their businesses' performance this year.

"The state of Tennessee works every day, with both employers and job seekers, to ensure there are jobs opportunities available across the state and there is a qualified workforce to fill those positions." Tennessee Labor Commissioner Burns Phillips said in a statement today. "This is one of the main reasons companies decide to locate or expand in Tennessee."

Despite the robust job growth in Tennessee, wage growth, at least in manufacturing, appears to remain subdued. The average factory wage in Tennessee last month was $19.60 an hour, or only 34 cents an hour or 1.8 percent more than a year ago.

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