Unemployment in Tennessee fell last month to its lowest level since before the pandemic struck in early 2020 while Georgia's jobless rate dropped even more during November to reach an all-time low as employers continue to scramble to find enough workers to meet the demands of the rebounding economy.
"The economic recovery has been incredibly strong so far, and the Tennessee economy seems to be on solid footing," said Larry Kessler, research associate professor in the Boyd Center for Business and Economic Research at the University of Tennessee. "Real GDP has already recovered to pre-pandemic levels due to a strong surge in consumer spending. Employment in the state has been a little slower to recover, but we expect job levels to recover by the first half of 2022."
After unemployment in Tennessee jumped to a record high 15.8% in April 2020, the jobless rate in Tennessee fell last month to 4% - the lowest since March 2020 before the coronavirus pandemic slowed the economy.
"This significant milestone is a testament to our fiscally responsible approach and commitment to meaningful work," Tennessee Gov. Bill Lee said in a statement late Thursday. "While we continue strengthening our workforce, Tennessee families and businesses will enter the new year in a new, hopeful chapter for our state's economy."
Georgia jobless hits new low
In neighboring Georgia, unemployment declined last month to 2.8% - the lowest level on record - while the number of Georgians on the job rose to a new high.
"We have fully recovered from this pandemic when it comes to employed Georgians, employing more people today than before the pandemic struck," Georgia Labor Commissioner Mark Butler said.
By the numbers
4.0% - Unemployment rate last month in Tennessee, down 0.2% from October and the lowest since March 20202.8% - Unemployment rate last month in Georgia, down 0.3% from October and the lowest on record4.2% - Unemployment rate last month nationwide, down 0.4% from October and the lowest since February 20205.6% - Estimated Tennessee GDP growth in 20214.2% - Projected Tennessee GDP growth in 2022Sources: Tennessee Department of Labor and Workforce Development, Georgia Department of Labor, Boyd Center for Business and Economic Research at the University of Tennessee
Kessler, who authored Tennessee's annual economic forecast released Thursday, predicts employment in the Volunteer State will reach pre-pandemic levels by the second quarter of 2022 - a quarter ahead of the nation's projected labor market recovery. Tennessee's unemployment rate is projected to settle around 4.7 % for all 2021 and fall to an average of 3.9% in 2022.
"Following a record-breaking year in terms of both job commitments and capital investment, the state economy continues its strong recovery," said Bob Rolfe, commissioner of the Tennessee Department of Economic and Community Development, who said the state recruited a record amount of new business investment in 2021.
Tennessee's nonfarm employment is projected to increase by 2.8% for 2021 and 3.1% in 2022, recovering to prepandemic levels by the second quarter of 2022. Real GDP in Tennessee is projected to be up by 5.6% this year and grow another 4.2% in 2022, Kessler said.
"There are still a number of downside risks to economic growth, including supply chain issues, higher prices and new COVID-19 cases and variants," Kessler said. "But the state economy has proven to be very resilient, and we project strong economic growth in the near term."
More jobs than unemployed
Tennessee career centers are advertising 410,000 open jobs, or more than four jobs for every one of the 102,687 persons who were unemployed and still looking for work last month in the state. The vacant jobs may not match up with the skills and needs of the unemployed individuals, and finding enough workers to fill employment needs is a challenge for many employers, Butler said.
"The hard work is still in front of us as job creation is outpacing new workers in the labor force," Butler said.
Georgia's labor force was down 235 in November to 5,174,199 and is up 1,220 over the previous seven months. In Tennessee, the labor force declined last month by 4,892 workers and is up less than 1% from a year earlier even as the jobless rate has declined and wages have increased.
Tennessee's labor force participation rate, which measures the share adults who are working or not working and actively looking for work, was at 61.8% two years ago before the pandemic. Due to more retirements and other shifts in the workforce, Kessler projects Tennessee's labor force participation rate will still be below the 2019 levels next year at 60.9% and rise to 61.4% in 2023 even after two consecutive years of solid job gains.
"There is no single explanation for the slower labor market recovery, but many Tennesseans have reflected on their work-life balance since the pandemic began, and some have decided to switch jobs while others may not be as quick to re-enter the labor force for various reasons," Kessler said.
Contact Dave Flessner at dflessner@timesfreepress.com or at 423-757-6340.