The number of new businesses being started in Tennessee continued to grow in the third quarter of 2016, marking five years of continuous business growth of a key barometer economists say signals even more growth in 2017.
And in the past year, the fastest growth in new business starts came in Hamilton County where Chattanooga is trying to encourage more business startups with the state's biggest business incubator and several new accelerator and investment funds.
"Hamilton County showed especially strong growth in the past year and we also saw the fastest job growth in the state in nearby Cleveland," said Dr. William F. Fox, director of the Boyd Center for Business and Economic Research at the University of Tennessee. "New entity filings have risen for a very impressive five straight years, evidencing a very solid Tennessee economy and signaling that more growth is expected through 2017."
Statewide, there were 8,898 new entity filings in the third quarter, a 7.3 percent increase over the third quarter of 2015. This marks the 20th consecutive quarter of positive year-over-year growth, boosting the number of active business entities in the state to 241,619 as of Oct. 1.
"We've seen this trend for quite some time, but reaching five years of continuous growth highlights why having the right leadership can make the Volunteer State a premier destination for businesses and industries from across the globe," Tennessee Secretary of State Tre Hargett said.
In Hamilton County, the number of initial business filings in the third quarter, 648, was up by 53.6 percent over a year ago. Hamilton County showed the biggest increase among the state's biggest counties, although Davidson County continued to have the most new business filings with 2,140 initial filings made during the three months ended Sept. 30.
In the self-proclaimed "Gig City" in Chattanooga, Mayor Andy Berke has designated downtown as an "Innovation District" for tech startups, and on the North Shore, Hamilton County operates one of the biggest business incubators in the country at the Chattanooga/Hamilton County Business Development Center. The Dynamo Fund was created this year to help encourage more logistics business startups, while the Company Lab continues to add new accelerator programs to help turn business ideas into viable companies.
Fox said the growth in business starts parallels the growth in employment, which is growing at about a 2.5 percent annual pace across Tennessee. The fastest growth pace in the state has been in Cleveland, Tenn., Fox said.
The Tennessee Department of Labor and Workforce Development reported Thursday the state's unemployment rate increased by 0.2 percentage points in September to 4.8 percent. But the state's jobless rate was still below the national rate of 4.9 percent.
The jobless rate in Tennessee has increased for four consecutive months since reaching a 15-year low of 4.1 percent in May and June.
Employment rose in October by 7,500 jobs across the state and Tennessee has added a net 70,700 jobs over the past year, state jobs figures show.
In neighboring Georgia, unemployment also edged higher last month due primarily to a continued influx of workers into the labor market.
The Georgia Department of Labor said the state's seasonally adjusted unemployment rate was 5.2 percent in October, up one-tenth of a percentage point from 5.1 percent in September. The rate in October 2015 was 5.5 percent.
"The rate increased slightly as our labor force grew by 27,795 as more job seekers began looking for work in October," Georgia Labor Commissioner Mark Butler said in his report on the October job market. "Since some new job seekers won't land a job immediately, they are counted as unemployed, which can result in a rate increase. But our employers continue to create jobs, so there are a lot of good opportunities for work."
The number of jobs increased by 6,700, or 0.2 percent, during October and employment in Georgia over the past year was up by 97,100, or 2.3 percent, Butler said.
Unemployment is expected to decline in the final two months of the year as holiday hiring boosts job openings. The U.S. Department of Labor said Thursday that the number of people seeking U.S. unemployment benefits fell last week to the lowest level since 1973, evidence that businesses are confident enough in the economy to hold onto their workers.
Weekly applications for jobless benefits fell 19,000 to a seasonally adjusted 235,000. The number of people receiving benefits fell 66,000 to 1.98 million, the fewest in more than 16 years.
"Clearly the latest news sent an upbeat signal about the labor market," said Daniel Silver, an economist at JPMorgan.
The Associated Press contributed to this report.
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