ETSU Bureau of Business and Economic Research

Tri-Cities Labor Market Report

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

THE METROPOLITAN AREA (CSA)

During the October to December period, the Tri-Cities metro area suffered the largest job losses since the recession year of 2009. Compared to the same period in 2012, regional job levels were lower by 2.6% to 224,023 while unemployment rose 0.4% to 16,742. Employment has now declined for the past seven quarters. The jobless rate for the Tri-Cities Consolidated Statistical Area (CSA) was 7.0%, compared to 6.8% a year earlier. This marks the third quarter of higher unemployment levels.

The annual data for 2013 reflect the growing weakness in the labor market. Employment in the metro area decreased by 1.6% to 225,589, well below the figures for 2011 and 2012. However, the number of jobless workers only increased 0.5% to 18,157, while the unemployment rate was relatively steady at 7.5%. The disparity between job losses and the small change in unemployment conditions is due to a large number of workers leaving the regional labor market, as shown in the 1.4% drop in the labor force to 243,746.

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

 
 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
 2013 243,746 -1.43 225,589 -1.58 18,157 0.49 7.45
 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
 13:1 244,740 -1.20 226,393 -1.05 18,347 -3.05 7.50
 13:2 244,965 -1.27 226,172 -1.57 18,793 2.54 7.67
 13:3 244,515 -0.88 225,769 -1.13 18,746 2.16 7.67
  13:4 240,765 -2.37 224,023 -2.58 16,742 0.40 6.95

THE TRI-CITIES

The growing weakness in the regional labor market is seen in the data for the three cities. During the fourth quarter, employment was down 3.8% in Johnson City, 2.9% in Kingsport, and 1.1% in Bristol. Jobless levels were higher in all three cities, pushing the unemployment rates to 6.7% in Kingsport, 7.0% in Johnson City, and 7.1% in Bristol. This marks the third quarter of rising unemployment in the three cities. The 2013 annual data for each city reflects the regional trends, with falling employment and rising unemployment. The disparity between large job losses and smaller unemployment changes is reflected in the drop in the labor force numbers.

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
 2013 32,925 -0.50 30,526 -0.56 2,399 0.27 7.29
 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 32,854 -0.78 30,503 -0.30 2,351 -6.70 7.16
 13:2 33,025 -0.55 30,574 -0.60 2,451 0.04 7.42
 13:3 33,088 -0.15 30,602 -0.19 2,486 0.40 7.51
 13:4 32,733 -0.50 30,424 -1.13 2,309 8.63 7.05
 

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
 2013 60,096 -2.21  55,594 -2.62 4,502 3.25 7.49
 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 60,520 -1.87 56,065 -1.92 4,455 -1.25 7.36
 13:2 60,450 -2.10 55,751 -2.69 4,699 5.42 7.77
 13:3 60,144 -1.55 55,442 -2.15 4,702 6.04 7.82
 13:4 59,271 -3.31 55,119 -3.74 4,151 2.80 7.00
 

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
 2013 50,077 -1.26 46,405 -1.45 3,671 1.24 7.33
 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 50,237 -1.01 46,512 -0.65 3,725 -4.02 7.42
 13:2 50,439 -0.80 46,581 -1.25 3,858 4.90 7.65
 13:3 50,360 -0.54 46,589 -0.90 3,770 4.11 7.49
  13:4 49,271 -2.69 45,940 -2.89 3,332 0.21 6.76

THE UNITED STATES

The national economy continued to create new jobs during the fourth quarter, though at a slower pace. On a year-to-year basis, national employment grew 0.6% to 144.4 million, marking the thirteenth quarter in a row of overall growth. However, the growth rate fell below the critical threshold of one percent which is necessary to accommodate population growth. Unemployment levels fell 11.3% to 10.3 million, pushing the fall unemployment rate down to 6.7% (compared to 7.5% in 2012 and 8.3% in 2011). The disparity in slower job growth and falling unemployment is explained by workers leaving the national job market. The U.S. labor force contracted for the first time since 2011.

The annual data for 2013 reflect a generally good year – at least until the fourth quarter. Compared to 2012, employment in the nation increased by 1.0% pushing the job count to 143.9 million. Unemployment for the year was 11.5 million, or 8.4% below 2012 levels. The annual jobless rate was 7.4%, compared to 8.1% in 2012. Overall, the national labor market still remains well below prerecession levels and current full employment goals.

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

 
  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
 2013 155,389 0.27 143,929 1.02 11,460 -8.36 7.37
 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
 13:2 155,854 0.49 144,332 1.19 11,521 -7.50 7.39
 13:3 156,234 0.40 144,758 1.23 11,477 -9.01 7.35
 13:4 154,790 -0.27 144,447 0.63 10,343 -11.32 6.68
 Note: Data are in thousands.

ANALYSIS

Labor market performance weakened during the fourth quarter at both the national and regional levels. The U.S. economy saw the rate of job creation fall well below the critical one percent level, and the regional labor market reported the worst results in nearly four years. Both the national and regional labor markets are now suffering declines in labor force size as discouraged job seekers drop out to join the ranks of the long-term unemployed. This is not an encouraging situation.

In the national labor market, the fourth quarter was the ninth quarter of employment growth, but the growth was not “significant” for the first time in two years. For the past eight quarters, the rate of job creation was high enough to accommodate the annual one percent growth in the labor force, and to provide re-employment for many of the workers who had been idled in the Great Recession.

At present, the national economy is not growing fast enough to accomplish either goal. Some 8.4 million discouraged workers still remain out of the labor force due to the Great Recession. If these long-term unemployed are added back into the labor force, the unemployment rate increases to 11.5%, compared to the 6.7% official rate. The “official” unemployment rate is probably the most worthless statistic currently being provided by the federal government.

In the region, employment has been falling for seven quarters, and the job losses in the fourth quarter were twice that of preceding quarters. Unemployment levels are starting to climb and the overall labor force is contracting as discouraged workers end their fruitless job searches.

Based on the fourth quarter performance, the economic outlook for the new year has become more uncertain. The national economy, even if it returns to the slow growth path of the past two years, will still not be able to create jobs at a meaningful level. Millions of workers will remain outside of the labor force and suffer the consequences of long-term unemployment. The Tri-Cities economy has been looking to growth in the U.S. economy to improve regional business activity. This might be a long wait.

Technical Note. This report was prepared in February 2014, 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.

Special Note. The labor market estimates in this report are based on BLS benchmark revisions issued in 2013, and new urbanized area definitions from the 2010 census. The figures in this report are not comparable to the figures in reports covering 2012 and earlier years. See the discussion in the labor market report for the first quarter of 2013.

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.