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Photo by Dave Flessner / The new 2nd & Charles store in the Oak Park shopping center in Hixson is among many retailers seeking to hire more workers amid the tightest labor market in over two decades.

Unemployment fell last month in the Chattanooga region to its lowest level in more than two decades as employers scrambled to fill nearly four times as many job openings as the number of workers still in the labor force without a job.

Employers in metro Chattanooga added nearly 4,300 jobs over the past year but fewer workers were in the labor market during October than were working or looking for a job a year earlier. The combination of more jobs and fewer workers cut the jobless rate to 2.9% in Chattanooga — tying the lowest rate since March 2001.

Just to the south in the Carpet Capital, unemployment in the Dalton metropolitan area dropped to 2.2% — the lowest since 1999. Two counties on the Tennessee border in Northwest Georgia — Catoosa and Walker — had one of the lowest jobless rates of any counties in the South last month at 1.7%, and their neighboring Georgia and Alabama counties also all had unemployment rates well below 3%.

"We're beyond full employment [where everyone wanting a job can find one] at these levels," said Jeffrey Humphreys, the director of the Selig Center for Economic Growth at the University of Georgia. "This reflects the strength of the rebound in manufacturing activities, especially in the housing and construction industries, which we are seeing in Dalton right now. Manufacturing centers like Dalton are leading the economic recovery right now, and Dalton is the best example of a manufacturing hub in Georgia."

When the COVID-19 virus first shut down many businesses and factories last year, the unemployment rate in Dalton jumped to a record high of 19.8% in April 2020. The strong demand for floor-covering products amid a wave of remodeling and home construction during the pandemic has more than restored the jobs temporarily idled at local carpet mills.

But Dalton, like most metro areas, has yet to regain all the workers it had before the pandemic and has a workforce with nearly 2,000 fewer workers than 12 months ago. Tennessee's workforce is down by nearly 80,000 workers from a year ago, even as the economy has opened back up and jobs have returned.

"A lot of people retired during the pandemic, and others are staying home to care for children, and they aren't returning to their old jobs," said Bill Fox, director of the Boyd Center for Business and Economic Research at the University of Tennessee. "We expect with the strong demand in the economy, we will see even lower unemployment rates in the future."

Humphreys said the drop in unemployment is helping boost worker wages but also creating some supply interruptions that are hurting economic growth in some sectors. Nonetheless, Humphreys and other economists expect the economy to grow at an above-average pace again next year and workers to be in some of their strongest bargaining positions with their employers that they have enjoyed in modern times.

(READ MORE: Chattanooga companies may look different post-COVID-19, experts say)

Jobless in October

Metro areas

— Scottsboro - 2.2%, down from 2.5% in September.

— Dalton - 2.4%, down from 2.6% in September.

— Chattanooga - 2.9%, unchanged from September.

— Cleveland - 3.1%, down from 3.3% in September.

Area counties

— Catoosa, Georgia - 1.7%, up from 1.6% in September.

— Dade, Georgia - 1.7%, up from 1.6% in September.

— Walker, Georgia - 1.9%, unchanged from September.

— Dekalb, Alabama - 2.2%, unchanged from September.

— Jackson, Alabama - 2.2%, down from 2.5% in September.

— Whitfield, Georgia - 2.3%, down fro 2.5% in September.

— Murray, Georgia - 2.6%, down from 2.8% in September.

— Chattooga, Georgia - 2.9%, down from 3.2% in September.

— Bradley - 3.1%, down 3.2% in September.

— Polk - 3.2%, down from 3.3% in September.

— Franklin - 3.2%, down from 3.4% in September.

— Coffee County, 3.2%, down from 3.4% in September.

— McMinn - 3.4%, down from 3.6% in September.

— Marion - 3.6%, up from 3.4% in September.

— Meigs - 3.6%, down from 3.7% in September.

— Sequatchie - 3.8%, unchanged from September.

— Van Buren - 4.1%, down from 4.7% in September.

— Grundy - 4.3%, down from 4.8% in September.

— Bledsoe - 4.5%, up from 4.3% in September.

— Bradley County - 3.1%, down from 3.2% in September.

Sources: Tennessee Department of Labor and Workforce Development, Georgia Department of Labor and Alabama Department of Labor.

"We are continuing to see all-time low unemployment rates across the state along with job growth in all of our statistical areas," Georgia Labor Commissioner Mark Butler said. "The focus now is getting more Georgians into the workforce to fill these critical positions, particularly as we gear up for a strong holiday employment season."

Retail stores that are expanding hours and operations for the year-end holiday rush are boosting wages and keeping their hiring signs out to lure more workers.

"We've had a good response, but we're still hiring," said Jonathan Franks, general manager for 2nd & Charles, a new book and record store that opened in late October in Hixson.

Food City, the region's biggest grocery chain, is seeking to hire hundreds of workers to fill positions at most of its grocery outlets, company president Steve Smith said.

"The labor market is a challenge for all of us as employers right now, but I would say our hiring is good right now — not great, but certainly good," Smith said.

Tennessee's career centers on Monday were advertising 399,646 available jobs across the state through Jobs4TN.gov. That's nearly four open jobs for every person counted as unemployed in Tennessee last month, although many of the job openings don't match the skills or needs of those looking for work.

"Americans head into the heart of the holiday season with a reasonable expectation that an already tight job market will continue to tighten in the months ahead," said Mark Hamrick, a senior economic analyst for Bankrate. "The strains associated with higher prices, shortages of supplies and available job candidates are weighed against low levels of layoffs, wage gains and a falling unemployment rate. Growth will likely be above par for the foreseeable future."

Contact Dave Flessner at dflessner@timesfreepress.com or at 423-757-6340.

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