ETSU Bureau of Business and Economic Research

Tri-Cities Labor Market Report

East Tennessee State University + First Quarter 2008 + College of Business and Technology

NEW BENCHMARK DATA

This labor market report is based on the new 2007 Benchmark of the Current Population Survey, U.S. Bureau of Labor Statistics. Each year, the BLS issues revised data for the labor markets in counties and cities. The revised employment figures for the Tri-Cities area show higher growth in 2006, but very little growth in the last half of 2007. Overall, current employment levels have been revised downward. In contrast, the unemployment rate revisions show only minor changes.

THE METROPOLITAN AREA (CSA)

The trend of slowing employment growth during 2007 (based on the revised data) became a slight dip in job levels during the first quarter. Metropolitan area employment fell by 0.2% to 230,495, a loss of 439 jobs compared to the same period in 2007. Linked to the loss in jobs, the number of unemployed workers increased by 13.2% to 12,484. The jobless rate for the Tri-Cities metro area during the January to March period was 5.1%, compared to 4.6% a year ago.

Employment trends in the region shifted during the winter months. In the fourteen NAICS industry sectors, employment levels were higher in five, lower in six, and unchanged in three. Job growth occurred in education & health, construction, leisure & hospitality, finance, and information services. Employment fell in durable manufacturing, nondurable manufacturing, professional & business services, wholesale trade, government, and transport & utilities. Job levels were stable in retail trade, mining, and other services.

    Labor Force Employment Unemployment
 Period  Level  Y-Y%Ch  Level  Y-Y%Ch  Level  Y-Y%Ch  Rate_
  2001 232,340 0.25 221,186 -0.47 11,155 17.23 4.80
 2002 233,364 0.44 220,150 -0.47 13,214 18.46 5.66
 2003 237,051 1.58 223,288 1.43 13,763 4.16 5.81
 2004 236,141 -0.38 223,084 -0.09 13,057 -5.13 5.53
 2005 237,424 0.54 224,919 0.82 12,505 -4.23 5.27
 2006 241,968 1.91 230,567 2.51 11,402 -8.82 4.71
 2007 243,069 0.45 232,397 0.79 10,672 -6.40 4.39
 06:1 239,536 1.79 227,180 2.68 12,355 -12.22 5.16
 06:2 241,501 2.02 229,921 2.56 11,580 -7.68 4.80
 06:3 242,856 2.07 231,579 2.42 11,277 -4.62 4.64
 06:4 243,980 1.78 233,585 2.39 10,395 -10.21 4.26
 07:1 241,960 1.01 230,934 1.65 11,026 -10.76 4.56
 07:2 241,671 0.07 231,747 0.79 9,924 -14.31 4.11
 07:3 243,496 0.26 232,903 0.57 10,593 -6.07 4.35
 07:4 245,148 0.48 234,002 0.18 11,146 7.23 4.55
 08:1 242,980 0.42 230,495 -0.19 12,484 13.23 5.14

THE TRI-CITIES

The regional dip in employment levels was reflected in the data for the three cities. During the first quarter, the number of jobs fell slightly in Bristol and Kingsport and was largely unchanged in Johnson City. Matching the regional trends, unemployment rose in all three cities. The jobless rate was 4.8% in Bristol, 4.8% in Kingsport, and 5.2% in Johnson City (compared to 5.1% for the entire metro area).

Bristol TN-VA Urbanized Area Labor Market

    Labor Force Employment Unemployment
 Period  Level  Y-Y%Ch  Level  Y-Y%Ch  Level  Y-Y%Ch  Rate_
 2001 27,153 0.37 25,981 -0.37 1,172 20.28 4.31
 2002 27,194 0.15 25,775 -0.79 1,419 21.14 5.22
 2003 27,691 1.83 26,071 1.15 1,620 14.15 5.85
 2004 27,182 -1.84 25,629 -1.69 1,553 -4.14 5.71
 2005 27,170 -0.05 25,749 0.47 1,421 -8.51 5.23
 2006 27,696 1.93 26,435 2.66 1,261 -11.28 4.55
 2007 27,706 0.04 26,485 0.19 1,221 -3.14 4.41
 06:1 27,520 2.41 26,139 3.36 1,381 -12.77 5.02
 06:2 27,715 2.08 26,408 2.71 1,306 -9.28 4.71
 06:3 27,845 1.96 26,619 2.59 1,227 -9.99 4.41
 06:4 27,702  1.30 26,574 2.01 1,128 -13.04 4.07
 07:1 27,601 0.29 26,347 0.79 1,255 -9.13 4.55
 07:2 27,591 -0.45 26,432 0.09 1,159 -11.25 4.20
 07:3 27,805 -0.14 26,605 -0.05 1,200 -2.20 4.32
 07:4 27,825 0.44 26,555 -0.07 1,270 12.56 4.56
 08:1  27,595 -0.02  26,253 -0.35  1,342 6.95 4.86

Johnson City Urbanized Area Labor Market

    Labor Force Employment Unemployment
 Period  Level  Y-Y%Ch  Level  Y-Y%Ch  Level  Y-Y%Ch  Rate_
 2001 51,885 -0.23 49,322 -0.84 2,563 13.36 4.94
 2002 52,147 0.50 49,107 -0.44 3,040 18.59 5.83
 2003 53,200 2.02 50,204 2.23 2,996 -1.44 5.63
 2004 54,144 1.77 51,240 2.06 2,904 -3.07 5.36
 2005 54,670 0.97 51,831 1.15 2,839 -2.26 5.19
 2006 55,723 1.93 53,134 2.51 2,589 -8.81 4.65
 2007 56,482 1.36 54,025 1.68 2,457 -5.08 4.35
 06:1 54,916 1.12 52,100 1.93 2,816 -11.86 5.13
 06:2 55,516 2.08 52,838 2.54 2,678 -6.27 4.82
 06:3 55,669 2.03 53,165 2.40 2,504 -5.21 4.50
 06:4 56,789 2.46 54,433 3.16 2,357 -11.45 4.15
 07:1 56,089 2.14 53,621 2.92 2,468 -12.38 4.40
 07:2 56,106 1.06 53,803 1.83 2,303 -14.00 4.10
 07:3 56,422 1.35 53,956 1.49 2,465 -1.57 4.37
 07:4 57,311 0.92 54,718 0.52 2,593 10.03 4.52
 08:1  56,592 0.90  53,653 0.06  2,939 19.10 5.19

Kingsport Urbanized Area Labor Market

    Labor Force Employment Unemployment
 Period  Level  Y-Y%Ch  Level  Y-Y%Ch  Level  Y-Y%Ch  Rate_
 2001 45,468 0.25 43,413 -0.42 2,056 16.99 4.52
 2002 45,401 -0.15 42,967 -1.03 2,435 18.44 5.36
 2003 45,901 1.10 43,209 0.56 2,692 10.57 5.86
 2004 45,130 -1.68 42,566 -1.49 2,564 -4.75 5.68
 2005 45,272 0.32 42,847 0.66 2,425 -5.42 5.36
 2006 46,178 2.00 44,012 2.72 2,166 -10.67 4.69
 2007 46,103 -0.16 44,183 0.39 1,920 -11.36 4.17
 06:1 45,668 2.02 43,358 3.18 2,310 -15.72 5.06
 06:2 46,244  2.19 43,999 2.96 2,245 -10.95 4.85
 06:3 46,526 2.23 44,314 2.64 2,212 -5.40 4.75
 06:4 46,276 1.57 44,377 2.11 1,899 -9.59 4.10
 07:1 45,816 0.32 43,806 1.03 2,009 -13.01 4.39
 07:2 45,948 -0.64 44,140 0.32 1,808 -19.47 3.93
 07:3 46,313 -0.46 44,362 0.11 1,952 -11.77 4.21
 07:4 46,335 0.13 44,422 0.10 1,912 0.70 4.13
 08:1  45,846  0.07  43,632 -0.40  2,214 10.18 4.83

THE UNITED STATES

The national labor market continued to weaken during the winter months, with virtually no change in employment levels (after 21 quarters of continuous job growth). Employment was 144.8 million during the first quarter of 2008, compared to 144.7 million in 2007. With no job growth, unemployment levels increased for the third quarter in a row. The number of jobless workers jumped 10.2% to level of 8.1 million (the first double digit increase since the 2001 recession). The January to March unemployment rate was 5.3%, compared to 4.8% a year ago.

Among the fourteen NAICS industry sectors, eight saw higher employment while the number of jobs declined in six. (The comparable numbers for the fall quarter were ten and four.) Employment was up in education & health services, leisure & hospitality, government, professional & business services, wholesale trade, other services, mining, and transport & utilities. Employment was down in construction, durable manufacturing, financial services, nondurable manufacturing, retail trade, and information services.

    Labor Force Employment Unemployment
 Period  Level  Y-Y%Ch  Level  Y-Y%Ch  Level  Y-Y%Ch  Rate_
 2001 143,734 0.81 136,933 0.03 6,801 19.48 4.73
 2002 144,863 0.79  136,485 -0.33 8,378 23.19 5.78
 2003 146,510 1.14 137,736 0.92 8,774 4.73 5.99
 2004 147,401 0.61 139,252 1.10 8,149 -7.12 5.53
 2005 149,320 1.30 141,730 1.78 7,591 -6.86  5.08
 2006 151,428 1.41 144,427 1.90 7,001 -7.77 4.62
 2007 153,124 1.12 146,047 1.12 7,078 1.10 4.62
 06:1 149,601 1.42 142,082 2.09 7,518 -9.70 5.03
 06:2 151,154 1.34 144,221 1.81 6,933 -7.52 4.59
 06:3 152,436 1.30 145,332 1.63 7,104 -4.96 4.66
 06:4 152,520 1.59 146,073 2.10 6,446 -8.74 4.23
 07:1 152,013 1.61 144,692 1.84 7,321 -2.63 4.82
 07:2 152,811 1.10 146,040 1.26 6,771 -2.34 4.43
 07:3 153,922 0.97 146,723 0.96 7,199 1.33 4.68
 07:4 153,752 0.81 146,732 0.45 7,020 8.90 4.57
 08:1 152,822 0.53 144,755 0.04 8,067 10.19 5.28
 Note: Data are in thousands.

ANALYSIS

The big question – are we in a recession? In the last labor market report we could say “Not yet”. But national and regional business conditions have declined over the winter months, and the answer today to the recession question is “Yes” and “No”.

A recession is popularly defined as two quarters of decline in real GDP. Yet real GDP has not declined and has actually shown modest growth over the past six months. But the labor market does not seem to know this – employment is flat and unemployment is up.

Some analysts refer to the present conditions as a “growth recession” where growth in output is so slow that the labor market deteriorates. In those industries and regions and families where those jobs have vanished, people definitely believe there is a recession. In the Tri-Cities we have seen our first small decline in employment.

What is the outlook for the national economy? On the positive side, real GDP was up modestly in the first quarter, unemployment was down in April, and the stock market has regained over half of its losses since January. As a stimulus, the Federal Reserve has cut interest rates again and the tax refund checks are appearing. Many analysts are expecting economic growth to pick up in the second half of 2008.

On the negative side, the first quarter growth in real GDP was due to an increase in inventories – actual sales of goods and services was down. And unemployment has clearly been trending upward over the past 12 months. The cut in interest rates was small and will be the last for a while, and much (most?) of the tax refunds will go to pay down household debt. And there is a group of economists who fear that the true recession is just starting.

In short, the national economy is not out of the woods yet. At a minimum we will probably see a further deterioration in the national labor market. In the region, labor market conditions will follow those national trends. The cushion in the Tri-Cities region is the strong job growth which we enjoyed in 2006 and 2007. We may lose some jobs in the “growth recession” but we will remain at a higher overall level of economic activity.

Technical Note. This report was prepared in May 2008, and is based upon the 2007 Benchmark of the Current Population Survey, U.S. Department of Labor. The labor markets for Bristol, Johnson City, and Kingsport are presented in terms of the U.S. Census Bureau concept of the "urbanized area" which includes the core city and the contiguous urban fringe. The urbanized area for each city is based upon demographic patterns from the 2000 Census of Population. The data in this report are not adjusted for seasonality, so comparisons should be made on a year-to-year basis.

More information. This report was prepared by Dr. F. Steb Hipple, Professor of Economics, and Research Associate, BBER. For more information, please contact Dr. Hipple c/o Department of Economics and Finance, Box 70686, East Tennessee State University, Johnson City, Tennessee 37614. Phone/Voicemail: 423-439-5304. Fax: 423-439-8583. E-Mail: hipples@etsu.edu . Website: http://faculty.etsu.edu/hipples.