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Photo by Dave Flessner, File / The Take 5 Oil Change outlet on Hixson Pike is among many area retailers still hiring workers despite a slight uptick in the unemployment rate last month in Chattanooga. The Hixson shop, which opened earlier this year, is one of 10 area stores that Take 5 is planning to eventually open in the Chattanooga area. Photo was taken June 18, 2022.

Despite a seasonal uptick in unemployment last month, the jobless rate in the Chattanooga area remained below the national average in May.

Employers in the six-county Chattanooga metropolitan area added 5,734 jobs over the past year to keep the local unemployment rate at 3.1%, compared to the U.S. jobless rate of 3.4%.

New data released by the Department of Labor and Workforce Development showed unemployment increased during May in metro Chattanooga by three-tenths of a percentage of a point from the near-record low of 2.8% in April. May is historically a time for job cuts as schools shut for the summer, some plants close for maintenance, and some Chattanooga consumers take their wallets to the beach or the mountains.

A year ago, unemployment in the Chattanooga area was 3.7%.

Unemployment rose in all 95 of Tennessee's counties last month. Only two counties — Perry County in Middle Tennessee and Bledsoe County in East Tennessee — had unemployment rates above 5%.

Even with higher unemployment, Tennessee's career centers still listed 423,373 job openings this week, or nearly four times as many jobs as there were people counted as unemployed last month. In Chattanooga, the Chamber of Commerce's list of available jobs on ChattanoogaCalling.com shows 37,897 open jobs or nearly five times the number of people counted as unemployed in May in metro Chattanooga.

Jobless in May

The non-seasonally adjusted unemployment rate rose during May in all but one of the 18 area counties in the Chattanooga region and only four counties were below the comparable U.S. jobless rate of 3.4% last month.

— Dade - 2.2%, up from 1.8% in April.

— Catoosa - 2.3%, up from 1.9% in April.

— Walker - 2.5%, up for 2.1% in April.

— Hamilton - 3.3%, up from 3% in April.

— Bradley - 3.4%, up from 3% in April.

— Chattooga - 3.4%, down 4.2% in April.

— Coffee - 3.4%, up from 3% in April.

— Franklin - 3.4%, up 3% in April.

— Whitfield - 3.5%, up from 2.6% in April.

— Polk - 3.6%, up from 3.2% in April.

— Marion - 3.7%, up from 3.3% in April.

— McMinn - 3.8%, up from 3.4% in April.

— Sequatchie - 3.8%, up from 3.5% in April.

— Rhea - 4%, up from 3.5% in April.

— Meigs - 4%, up from 3.% in April.

— Van Buren - 4.2%, up from 3.9% in April.

— Grundy - 4.6%, up from 4.2% in April.

— Bledsoe - 5.1%, up from 4.7% in April.

Sources: Georgia Department of Labor and the Tennessee Department of Labor and Workforce Development

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Photo by Dave Flessner, File / The newly renovated Mapco store on Hixson Pike is seeking to hire more workers. Mapco is also building a bigger location on Shallowford Road which is expected to open later this year. Unemployment edged higher in Chattanooga last month but remains below the national average. Photo was taken June 18, 2022.
 

William Fox, director of the Boyd Center for Business and Economic Research at the University of Tennesse, said rising interest rates and inflation should curb economic growth across Tennessee this year.

"We still have a very healthy job market at this point, but we would expect a slower growth in overall employment and we may see some job losses in some areas," Fox said during a telephone interview last week.

To the south in metropolitan Dalton, Georgia, unemployment also rose last month to 3.5%, up nine-tenths of a percent over the month. A year ago, the rate was 4%.

"Even though the labor force increased in all of our regions, counties and metropolitan service areas, job postings continue to outpace those gains, placing strain on employers to find talent for open positions," Georgia Labor Commissioner Mark Butler said in a report on the new jobless figures. "Many areas across our state are experiencing difficulty in filling many of the seasonal, temporary jobs normally filled with summer workers, due to the opportunities in full-time employment."

Employment in metro Dalton, which bills itself as the Carpet Capital of the World, increased by 640 jobs over the past year, Butler said.

Unemployment may move higher this year as the Federal Reserve Board raises interest rates and tightens its monetary policy to slow the economy to help combat inflation, which rose in the past 12 months at the fastest pace in four decades.

Federal Reserve Chairman Jerome Powell told Congress this week he is hoping an increase in labor supply will help relieve some of the upward pressure on wages, without necessitating a rise in the unemployment rate.

"We are strongly committed to bringing inflation back down, and we are moving expeditiously to do so," the Fed chief said in remarks for the Senate Banking Committee. "We have both the tools we need and the resolve it will take to restore price stability on behalf of American families and businesses."

Powell said economic conditions are generally favorable, with a strong labor market and persistently high demand.

"It's a really attractive labor market for people," he said. "As we get past COVID well and truly, it becomes an even more attractive one."

But Sen. Elizabeth Warren, D-Massachusetts, warned Powell that continued interest rate hikes could "tip this economy into recession" without stopping inflation.

"You know what's worse than high inflation and low unemployment is high inflation and a recession with millions of people out of work, and I hope you'll reconsider that before you drive the economy off a cliff," she said.

The Associated Press contributed to this report.

Contact Dave Flessner at dflessner@timesfreepress.com or at 423-757-6340. Follow him on Twitter @dflessner1.

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