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Unemployment in Tennessee edged higher last month but remained near the record low levels reached last fall as employers in the Volunteer State continued to add jobs at nearly twice the rate for the country as a whole.
The Tennessee Department of Labor and Workforce Development said Thursday 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.
With unemployment below the U.S. average, SunTrust Chattanooga Market President Jim Vaughn said many employers say their biggest problem today is finding enough qualified workers.
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.
“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.
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.
Vaughn said that workforce development is one of the top priorities for the Chattanooga Area Chamber of Commerce and the Chattanooga 2.0 initiative because cultivating a qualified labor force is key to the current and future growth on the local economy.
Tennessee Gov. Bill Haslam, who touted the near record low jobless rate in Tennessee, said programs to help more students and workers go to college are helping the Volunteer State to improve its economy.
“As we continue to invest in our workforce though the Tennessee Promise and Tennessee Reconnect programs, Tennessee will lead in high-quality job growth,” Haslam said Thursday.
But the biggest job growth in Tennessee came in the service industries, especially at restaurants and hotels that often have below average wage rates. 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 which typically have higher average pay lost a combined 1,500 jobs in Tennessee over the past year, dropping by 0.2 percent in the 12 months ended in February 2018.
“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. “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.
Contact Dave Flessner at email@example.com or at 757-6340.
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