Tennessee
[Note: Indicators Updated September 10, 2020]
- Indicators for June are generally positive as Tennessee’s economy slowly rebounds from the crisis caused by the COVID-19 pandemic. The unemployment rate is continuing to decline this month, decreasing 1.50 percentage points to 8.50%. Single-family housing permits surged by 26.68%, and nonfarm employment rose 2.75% over the month. Additionally, June sales tax collections increased by 12.38% compared to May. All MSAs saw similar decreases in the unemployment rate, increases in housing permits, and increases in sales tax collections. Most MSAs saw increases in nonfarm employment in monthly comparisons. However, some indicators continued to worsen. Although initial claims for unemployment insurance dropped substantially in May, numbers rose again in June, by 2.56%. Average hourly earnings decreased over the month by 1.45% and 2.16% when adjusted for inflation.
- Seasonally adjusted weekly initial claims for unemployment insurance rose by 2.56% over the month, to an average of 19,744 for June. This is a 739.96% increase when compared to this month last year. [graph]
- Permits issued for single-family home construction spiked in June by 28.68% when compared to last month. Six MSAs also saw significant growth in permit numbers in this month. Johnson City MSA experienced a drastic surge in permits: increases of over 310% over the month and year. In contrast, Clarksville MSA saw a 23.46% increase in annual comparisons, but a 21.64% decrease over the month. [graph]
- State sales tax collections increased by 12.38% over the month but dropped by 1.39% over the year. Collections in all ten MSAs increased by over 10% when compared to collections in May. Jackson MSA saw the highest increase for both the month and year, 21.33% and 36.54%, respectively. Some MSAs, like Nashville MSA, experienced growth compared to May (11.22%) but decreases compared to last June (-10.93%). [graph]
- Seasonally adjusted nonfarm employment increased statewide (2.75%) and across all MSAs when compared to May. Nonetheless, in annual comparisons, nonfarm employment fell in Tennessee (-4.86%) and nine MSAs. [graph]
- The unemployment rate in Tennessee continued to decline in June, down 1.50 percentage points to 8.50%. All MSAs saw similar reductions. Tennessee’s unemployment rate is comparatively lower than the United States (10.05%). [graph]
- Average weekly hours were 34.78 in June. This is a 0.21% increase from May and a 2.00% decrease from last year. Knoxville MSA saw the most significant upswing over the month (1.56%), while Cleveland MSA saw the most severe downturn (-2.87%). All but two areas experienced decreases over the year; Jackson MSA sustained the largest yearly decline in hours, at -9.27%. [graph]
- Average hourly earnings declined by 1.45% from May to $24.79. However, this is a 1.76% increase over the year. When adjusted for inflation, wages have decreased by 2.16% to $20.48. [graph]
— Research by Murat Arik, Director of BERC. Real average hourly earnings are calculated by dividing nominal hourly earnings by the monthly CPI-U for the South published by the Bureau of Labor Statistics.