ETSU Bureau of Business and Economic Research

Tri-Cities Labor Market Report

East Tennessee State University + First Quarter 2013 + College of Business and Technology

(This report is based on revised benchmark data and updated definitions

of urbanized areas. Refer to the discussion at the end of the report.)

THE METROPOLITAN AREA (CSA)

Employment in the metro area declined again in the first quarter, continuing a trend that began last spring (based on the revised data). Compared to the same period in 2012, regional job levels were lower by 1.0% to 226,404 while unemployment fell 3.0% to 18,350. Over the January to March period, the jobless rate for the Tri-Cities Consolidated Statistical Area (CSA) was 7.5%, compared to 7.6% a year earlier. Despite the lower employment figures, jobless levels continued to decline as some workers became discouraged and dropped out of the regional job market altogether, while others left the region seeking work in other places where employment is growing. This fall in unemployment was large enough to reduce the CSA unemployment rate.

Among the twelve regional NAICS industry sectors, employment levels were higher in six, lower in four, and unchanged in two (compared to four, seven, and one in the fourth quarter). Job growth was led by education & health services, professional & business services, leisure & hospitality, and other services. Smaller gains were reported by retail trade and transport & utilities. Job losses occurred in construction, government, information services, and finance. Employment was unchanged in manufacturing and wholesale trade.

 
 Labor Force Employment Unemployment
 Period  Level  Y-Y%Ch  Level  Y-Y%Ch  Level  Y-Y%Ch  Rate_
 2007 243,442 0.65 232,670 1.01 10,771 -6.59 4.42
 2008 247,849 1.81 233,510 0.36 14,340 33.13 5.79
 2009 246,766 -0.44 223,402 -4.33 23,364 62.94 9.47
 2010 248,314 0.63 225,930 1.13  22,384 -4.20 9.01
 2011 250,673 0.95 230,033 1.82 20,639 -7.79 8.23
 2012 247,285 -1.35 229,216 -0.36 18,069 -12.45 7.31
 07:1 243,149 1.50 232,120 2.22 11,029 -11.63 4.54
 07:2  242,188 0.23 232,244 1.05 9,944 -15.78 4.11
 07:3 243,529 0.28 232,862 0.59 10,667 -6.18 4.38
 07:4 244,901 0.59 233,455 0.20 11,446 9.36 4.67
 08:1 246,184 1.25 233,435 0.57  12,749 15.60 5.18
 08:2 247,650 2.26 233,944 0.73 13,706 37.83 5.53
 08:3 248,452 2.02 233,362 0.21 15,090 41.46 6.07
 08:4 249,111 1.72 233,297 -0.07 15,814 38.16 6.35
 09:1  247,598 0.57 225,275 -3.50 22,323 75.09 9.02
 09:2 248,181 0.21 224,035 -4.24 24,147 76.18 9.73
 09:3 246,680 -0.71 222,647 -4.59 24,033 59.27 9.74
 09:4 244,606 -1.81 221,651 -4.99 22,955 45.16 9.38
 10:1 244,540 -1.24 219,864 -2.40 24,676 10.54 10.09
 10:2 249,778 0.64 227,781 1.67 21,997 -8.90 8.81
 10:3 249,976 1.34 228,280 2.53 21,695 -9.73 8.68
 10:4  248,963 1.78 227,797 2.77 21,167 -7.79 8.50
 11:1 249,507 2.03 227,403 3.43 22,104 -10.42 8.86
 11:2 251,173 0.56 230,033 0.99 21,139 -3.90 8.42
 11:3 251,467 0.60 230,464 0.96 21,003 -3.19 8.35
 11:4 250,544 0.63 232,234 1.95 18,310 -13.50 7.31
 12:1 247,713 -0.72 228,789 0.61 18,924 -14.39 7.64
 12:2 248,115 -1.22 229,788 -0.11 18,327 -13.30 7.39
 12:3 246,694 -1.90 228,344 -0.92 18,350 -12.63 7.44
 12:4 246,619 -1.57 229,945 -0.99 16,675 -8.93 6.76
 13:1 244,755 -1.19 226,404 -1.04 18,350 -3.03 7.50

THE TRI-CITIES

The employment picture in the three cities continued to mirror regional conditions. Job levels were down again, continuing a trend that began in mid-2012 (based on the revised data). The largest year-to-year job loss was reported by Johnson City where employment was down by 1.9%, followed by a 0.8% decline in Kingsport and a 0.3% decline in Bristol. Despite the lower employment figures, jobless levels continued to decline as some workers became discouraged and left the job market altogether, while others left the area seeking jobs in other regions where employers are hiring. The resulting January to March unemployment rate was 7.2% in Bristol, 7.4 in Johnson City, and 7.4% in Kingsport.

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_
 2007 32,317 0.14 30,876 0.18 1,441 -0.91 4.46
 2008 32,989 2.08 31,222 1.12 1,767 22.58 5.36
 2009 32,872 -0.35 29,846 -4.41 3,027 71.31 9.21
 2010 33,062 0.58 30,103 0.86 2,960 -2.21 8.95
 2011 33,533 1.42 30,791 2.29 2,742 -7.34 8.18
 2012 33,089 -1.32  30,696 -0.31 2,393 -12.75 7.23
 07:1 32,271 0.53 30,804 0.97 1,467 -7.94 4.55
 07:2 32,155 -0.37 30,803 0.08 1,352 -9.49 4.20
 07:3 32,377 -0.25 30,983 -0.22 1,394 -1.02 4.31
 07:4 32,464 0.64 30,912 -0.07 1,552 17.37 4.78
 08:1 32,759 1.51 31,214 1.33 1,545 5.29 4.72
 08:2 32,998 2.62 31,338 1.74 1,660 22.79 5.03
 08:3 33,060 2.27  31,243 0.84 1,868 34.02 5.64
 08:4 33,087 1.92 31,094 0.59 1,994 28.49 6.03
 09:1 33,157 1.21 30,266 -3.04 2,891 87.11 8.72
 09:2 33,013 0.05 29,995 -4.29 3,018 81.81 9.14
 09:3 32,948 -0.49 29,766 -4.73 3,182 70.34 9.66
 09:4 32,372 -2.16 29,356 -5.59 3,015 51.24 9.31
 10:1 32,576 -1.75 29,425 -2.78 3,151 9.00 9.67
 10:2 33,088 0.23  30,186 0.64 2,902 -3.87 8.77
 10:3 33,410 1.40 30,407 2.15 3,004 -5.61 8.99
 10:4 33,175 2.48 30,392 3.53 2,782 -7.71 8.39
 11:1 33,137 1.72 30,344 3.12 2,793 -11.36 8.43
 11:2 33,490 1.21 30,811 2.07 2,679 -7.67 8.00
 11:3 33,847 1.31 30,944 1.77 2,903 -3.36 8.58
 11:4 33,659 1.46 31,064 2.21 2,595 -6.75 7.71
 12:1 33,113 -0.07 30,593 0.82 2,520 -9.78 7.61
 12:2 33,207 -0.84 30,757 -0.17 2,450 -8.56 7.38
 12:3 33,138 -2.10 30,662 -0.91 2,476 -14.72 7.47
 12:4 32,898 -2.26 30,773 -0.94 2,125 -18.09 6.46
 13:1 32,852 -0.79 30,504 -0.29 2,349 -6.78 7.15
 

Johnson City Urbanized Area Labor Market

 
 Labor Force Employment Unemployment
 Period  Level  Y-Y%Ch  Level  Y-Y%Ch  Level  Y-Y%Ch  Rate_
 2007 60,658 1.91 58,000 2.24 2,658 -4.72 4.38
 2008 61,431 1.27 57,767 -0.40 3,663 37.83 5.96
 2009 61,093 -0.55 55,458 -4.00 5,635 53.83 9.22
 2010 61,950 1.40  56,422 1.74 5,529 -1.89 8.92
 2011 62,403 0.73 57,256 1.48 5,147 -6.89 8.25
 2012 61,453 -1.52 57,093 -0.28 4,360 -15.29 7.10
 07:1 60,518 3.09 57,884 3.94 2,633 -12.67 4.04
 07:2 60,316 1.59 57,844 2.45 2,472 -15.19 4.10
 07:3 60,502 1.70 57,841 1.85 2,661 -1.29 4.40
 07:4 61,295 1.29 58,431 0.77 2,864 13.15 4.67
 08:1 61,082 0.93  57,811 -0.13 3,270 24.19 5.35
 08:2 61,270 1.58 57,741 -0.18 3,529 42.73 5.76
 08:3 61,441 1.55 57,609 -0.40 3,832 43.99 6.24
 08:4 61,930 1.04 57,908 -0.90 4,022 40.42 6.49
 09:1 60,995 -0.14 55,557 -3.90 5,438 66.29 8.92
 09:2 61,175 -0.16 55,472 -3.93 5,702 61.59 9.32
 09:3 61,033 -0.66 55,206 -4.17 5,827 52.07 9.55
 09:4 61,170 -1.23 55,598 -3.99 5,572 38.55 9.11
 10:1 60,842 -0.25 54,869 -1.24 5,973 9.84 9.82
 10:2 62,558 2.26 57,128 2.98 5,430 -4.77 8.68
 10:3 62,332 2.13 56,954 3.17 5,378 -7.71 8.63
 10:4 62,069 1.47 56,737 2.05 5,332 -4.30 8.59
 11:1 62,347 2.47 56,829 3.57 5,518 -7.62 8.85
 11:2 62,493 -0.10 57,149 0.04 5,344 -1.58 8.55
 11:3 62,353 0.03 57,121 0.29 5,232 -2.71 8.39
 11:4 62,421 0.57 57,925 2.09 4,495 -15.70 7.20
 12:1 61,673 -1.08 57,162 0.59 4,511 -18.25 7.31
 12:2 61,747 -1.19 57,290 0.25 4,457 -16.60 7.22
 12:3 61,093 -2.02 56,658 -0.81 4,435 -15.24 7.26
 12:4 61,300 -1.79 57,262 -1.14 4,038 -10.17 6.59
 13:1 60,524 -1.86 56,068 -1.91 4,456 -1.22 7.36
 

Kingsport Urbanized Area Labor Market

 
 Labor Force Employment Unemployment
 Period  Level  Y-Y%Ch  Level  Y-Y%Ch  Level  Y-Y%Ch  Rate_
 2007 49,906 -0.01 47,811 0.57 2,096 -11.74 4.20
  2008 50,764 1.72 47,921 0.23 2,843 35.66 5.60
 2009 50,723 -0.08 46,004 -4.00 4,719 65.98 9.30
 2010 50,874 0.30 46,424 0.91 4,450 -5.69 8.75
 2011 51,420 1.07 47,350 2.00 4,070 -8.54 7.92
 2012 50,716 -1.37 47,089 -0.55 3,626 -10.90 7.15
 07:1 49,827 0.84 47,666 1.66 2,160 -14.40 4.34
 07:2 49,783 -0.50 47,828 0.57 1,955 -21.07 3.93
  07:3 50,068 -0.46 47,941 0.11 2,128 -11.85 4.25
 07:4 49,947 0.09 47,807 -0.03 2,139 2.70 4.28
 08:1 50,294 0.94 47,815 0.31 2,479 14.75 4.93
 08:2 50,817 2.08 48,056 0.48 2,761 41.21 5.43
 08:3 51,017 1.89 47,963 0.05 3,054 43.52 5.99
 08:4 50,929 1.97 47,851 0.09 3,078 43.89 6.04
 09:1 50,833 1.07 46,488 -2.78 4,345 75.27 8.55
  09:2 51,228 0.81 46,177 -3.91 5,051 82.94 9.86
 09:3 50,750 -0.52 45,889 -4.32 4,861 59.18 9.58
 09:4 50,081 -1.66 45,464 -4.99 4,618 50.02 9.22
 10:1 49,933 -1.77 44,913 -3.39 5,020 15.53 10.05
 10:2 51,339 0.22 46,859 1.48 4,480 -11.30 8.73
 10:3 51,198 0.88 47,004 2.43 4,194 -13.71 8.19
 10:4 51,025 1.88 46,918 3.20 4,106 -11.08 8.05
  11:1 51,134 2.41 46,722 4.03 4,412 -12.11 8.63
 11:2 51,594 0.50 47,451 1.26 4,143 -7.53 8.03
 11:3 51,626 0.84 47,542 1.14 4,084 -2.62 7.91
 11:4 51,327 0.59 47,686 1.64 3,641 -11.33 7.09
 12:1 50,750 -0.75 46,869 0.31 3,881 -12.02 7.65
 12:2 50,847 -1.45 47,169 -0.59 3,678 -11.22 7.23
 12:3 50,633 -1.92 47,012 -1.11 3,622 -11.33 7.15
  12:4 50,633 -1.35 47,308 -0.79 3,325 -8.69 6.57
 13:1 50,244 -1.00 46,517 -0.75 3,727 -3.97 7.42

THE UNITED STATES

During the first quarter, the national economy continued to add jobs but at a slower pace. On a year-to-year basis, national employment grew 1.1% to 142.2 million, marking the tenth quarter in a row of overall growth, and the sixth quarter of significant growth. In line with rising employment, jobless levels declined for the eleventh quarter in a row, falling 6.0% to 12.5 million. The winter unemployment rate was 8.1% (compared to 8.6% in 2012 and 9.5% in 2011).

Among the twelve national NAICS industry sectors, employment increased in eleven sectors and decreased in one sector (compared to ten and two in the fourth quarter). Job gains were led by professional & business services, education & health services, leisure & hospitality, retail trade, construction, and manufacturing. Smaller employment increases occurred in finance, wholesale trade, transportation & utilities, other services, and information services. Job losses were limited to the government sector as the sequester impacts take hold.

 
 Labor Force Employment Unemployment
 Period  Level  Y-Y%Ch  Level  Y-Y%Ch  Level  Y-Y%Ch  Rate_
 2007 153,124 1.12 146,047 1.12 7,078 1.10 4.62
 2008 154,287 0.76 145,362 -0.47 8,924 26.09 5.78
 2009 154,142 -0.09 139,878 -3.77 14,265  59.84 9.25
 2010 153,889 -0.16 139,064 -0.58 14,825 3.93 9.63
 2011 153,617 -0.18 139,869 0.58 13,747 -7.27 8.95
 2012 154,975 0.88 142,469 1.86 12,506 -9.03 8.07
 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
 08:2 154,264 0.95 146,165 0.09 8,099 19.61 5.25
 08:3 155,399 0.96 146,029 -0.47 9,370 30.17 6.03
 08:4 154,662 0.59 144,501 -1.52 10,161 44.74 6.57
 09:1 153,659 0.55 140,125 -3.20 13,534 67.77 8.81
 09:2 154,697 0.28 140,592 -3.81 14,105 74.17 9.12
 09:3 154,923 -0.31 140,069 -4.08 14,854 58.52 9.59
 09:4 153,289 -0.89 138,724 -4.00 14,565 43.34 9.50
 10:1 153,270 -0.25 137,332 -1.99 15,939 17.76 10.40
 10:2 154,181 -0.33 139,560 -0.73 14,621 3.66 9.48
  10:3 154,601 -0.21 139,923 -0.10 14,679 -1.18 9.49
 10:4 153,502 0.14 139,441 0.52 14,061 -3.46 9.16
 11:1 152,731 -0.35 138,218 0.65 14,513 -8.94 9.50
 11:2 153,628 -0.36 139,939 0.27 13,689 -6.37 8.91
 11:3 154,392 -0.14 140,407 0.35 13,985 -4.72 9.06
 11:4 153,715 0.14 140,913 1.06 12,802 -8.95 8.33
 12:1 153,972 0.81 140,680 1.78 13,292 -8.42 8.63
  12:2 155,096 0.96 142,641 1.93 12,455 -9.01 8.03
 12:3 155,618 0.79 143,006 1.85 12,613 -9.82 8.10
 12:4 155,212 0.97 143,549 1.87 11,663 -8.90 7.51
 13:1 154,679 0.46 142,180 1.07 12,499 -5.97 8.08
 Note: Data are in thousands.

ANALYSIS

The labor market patterns of recent quarters (based on revised data) continued into the first months of 2013. Employment fell again in the region and the individual cities while job growth slowed in the nation. Many analysts feel that part of this negative labor market picture is due to the policy uncertainty in Washington. The “fiscal cliff” dominated the situation until January (when it was solved), only to be replaced by the “budget cliff” in March (which has been kicked down the road again to the fall), and the “sequester cliff” (which was not solved and is currently reducing government employment levels).

The regional and local economies – based on the revised data which is discussed below – saw job growth in 2010 and 2011, but have been beset by a new cycle of job losses in 2012, just as the national economy began to show signs of revival. The regional and local labor markets covered by this report have seen falling unemployment and lower unemployment rates. These reduced jobless rates however may give a false impression of the health of the labor markets. As noted above, in the face of fewer jobs, the unemployment level can be reduced by discouraged workers leaving the labor force or leaving the area to look for work elsewhere. With the national economy reviving while the area economy weakens will create a strong pressure on job seekers to try their luck in areas where employment is increasing.

Turning to the national labor market, other forces are at work. The first quarter was the sixth quarter of significant employment growth, where “significant” means that job creation was more than one percent - the long term growth rate of the U.S. population and labor force. However, the employment increase in the January to March period was only 1.1% which means that little was done to re-employ the millions of millions of workers who remain jobless due to the Great Recession and the continuing weakness of the economic recovery (what economists call “cyclical unemployment”).

Cyclical unemployment in the first quarter of 2013 was 10.2 million, which was composed of 6.3 million workers who have dropped out of the labor force, and 3.9 million who are still job hunting. If the 6.3 million discouraged workers are added back into the labor force, the actual unemployment rate is 11.7%, well above the “official” rate of 8.1%.

The economic outlook has become more uncertain – still dominated by the political paralysis in the nation’s capital. The region has seen four quarters of job losses which have wiped out part of the strong job gains from 2010 and 2011. The slowdown in national employment growth means that the Tri-Cities area cannot look for a boost any time soon from this direction.

DATA NOTES

Data Sources: This report is based on two data surveys from the U.S. Bureau of Labor Statistics (BLS). The data used for employment by industry are based on the monthly survey of the places where people work. This survey is officially the Current Employment Survey (CES), but the term “establishment survey” is preferred by the BLS. This survey is also called the “payroll survey”. These data have not been changed.

The data used for the labor markets are based on the monthly survey of the homes where people live. This survey is officially the Current Population Survey (CPS), but the term “household survey” is preferred by the BLS. These household labor market data for states, metro areas, cities, and counties have been revised through the annual benchmarking process. The national labor market data are unaffected by these revisions.

New Annual Benchmark Data: This labor market report is based on the new 2012 BLS Benchmark of the Current Population Survey, more commonly called the “household survey”. Each year, the BLS issues revised data for the labor markets in states, metro areas, cities, and counties. The 2012 benchmark revisions cover the years 2007 to 2012. Usually the changes are small, but in this revision the BLS has made significant alterations. The tables in this report have been expanded to show all of the revised data.

 
 2011 Benchmark 2012 Benchmark
 Period  Level  Y-Y%Ch  Level  Y-Y%Ch 
 2007 232,670 1.01 232,670 1.01
 2008 233,338 0.29 233,510 0.36
 2009 224,384 -3.84 223,402 -4.33
 2010 227,607 1.44 225,930 1.13
 2011 231,924 1.90 230,033 1.82
 2012 232,328 0.17 229,216 -0.36
 

The table compares the Tri-Cities metro area employment under the old 2011 benchmark and the new 2012 benchmark over the 2007 to 2012 period. The revised benchmark data substantially alters the profile of job losses and gains over the current business cycle. The changes to 2007 and 2008 are small, but the new employment estimate for 2009 shows an employment drop of 10,000 jobs compared to the previous estimate of 9,000 job losses in the 2009 recession. Under the new benchmark, the job growth in 2010 and 2011 is 6,600 jobs compared to the previous estimate of 7,500 new jobs being created.

The effect is to make the recession more severe and the recovery smaller. Combined, the metro employment level in 2011 was still 3,500 jobs short of the 2008 peak. Even so, the analyses we have developed over the past three years remains valid. Compared to the nation, we entered the recession a year late and saw a significant recovery ahead of the nation as a whole.

Since 2007, the relatively strong employment growth in the Tri-Cities CSA has attracted job seekers from other regions which has affected the figures for unemployment and the labor force as a whole. These job seekers are now leaving the area as regional employment levels decline while the national economy is finally creating significant numbers of new jobs.

New Urbanized Area Definitions: For the past ten years this report has used the urbanized area (UZA) definitions from the 2000 Census of Population. The UZA definitions from the 2010 Census are now available, and have been used to revise the labor market data for the three cities back to 2006. Note that the city labor market estimates are affected by both the new 2012 benchmark revisions and the new UZA definitions.

The urbanized area includes the core city and the contiguous urban fringe, and must exceed 50,000 in population. The 2010 population for the Bristol (TN-VA) UZA is 69, 501, the Kingsport UZA is 106,571, and the Johnson City UZA is 120,415. The population for the Tri-Cities Consolidated Statistical Area is 508,260.

Since 2000, the urban footprint of each city has expanded so that the UZA populations now include a larger share of the metro population. In the UZA tables for each city, the size of the labor force, employment levels, and unemployment levels are now larger. The UZA jobless rates are largely unchanged.

Technical Note. This report was prepared in May 2013, and is based upon the 2012 benchmark of the Current Population Survey, U.S. Bureau of Labor Statistics. The labor markets for Bristol, Johnson City, and Kingsport are presented in terms of the U.S. Census Bureau concept of the urbanized area (UZA) which includes the core city and the contiguous urban fringe. The urbanized area for each city is based upon demographic patterns from the 2010 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.