ETSU Bureau of Business and Economic Research

Tri-Cities Labor Market Report

East Tennessee State University + First Quarter 2014 + College of Business and Technology

(This report is based on revised benchmark data. See the note at the end of the report.)

THE METROPOLITAN AREA (CSA)

During the first quarter, the Tri-Cities Consolidated Statistical Area (CSA) continued to see job losses. Compared to the same period in 2013, regional job levels were lower by 0.7% to 221,514. Employment has now declined for the past eight quarters and increasing numbers of jobless workers are withdrawing from the regional labor force. As a result, unemployment fell 16.5% to 16,072, and the labor force contracted by 1.9% to 237,586. The jobless rate for the metro area was 6.8%, compared to 7.9% a year earlier. Under these conditions, a falling unemployment rate is a sign of labor market weakness.

Among the twelve regional NAICS industry sectors, employment levels were higher in seven, lower in three, and unchanged in two sectors (compared to six, four, and two in the fourth quarter). Job growth was led by professional & business services, leisure & hospitality, and transport & utilities. Smaller employment gains were reported by retail trade, wholesale trade, finance, and other services. Job losses occurred in government, manufacturing, and education & health services. Employment was unchanged in construction and information 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 246,934 -0.37 223,514 -4.28 23,420 63.32 9.48
 2010 248,812 0.76 226,089 1.15 22,723 -2.97 9.13
 2011 251,275 0.99 230,095 1.77 21,179 -6.79 8.43
 2012 246,628 -1.85 227,945 -0.93 18,683 -11.79 7.58
 2013 240,868 -2.34 222,552 -2.37 18,317 -1.96 7.60
 11:1 250,141 2.14 227,508 3.43 22,632 -9.23 9.05
 11:2 251,817 0.63 230,141 0.97 21,676 -2.79 8.61
 11:3 252,198 0.61 230,652 0.91 21,547 -2.50 8.54
 11:4 250,942 0.60 232,080 1.84 18,863 -12.51 7.52
 12:1 247,839 -0.92 228,434 0.41 19,405 -14.26 7.83
 12:2 247,532 -1.70 228,666 -0.64 18,866 -12.96 7.62
 12:3 245,888 -2.50 226,897 -1.63 18,991 -11.86 7.72
 12:4 245,253 -2.27 227,784 -1.85 17,468 -7.39 7.12
 13:1 242,292 -2.24 223,052 -2.36 19,240 -0.85 7.94
 13:2 242,168 -2.17 223,442 -2.28 18,726 -0.74 7.73
 13:3 240,690 -2.11 222,106 -2.11 18,584 -2.14 7.72
 13:4 238,324 -2.83 221,606 -2.71 16,718 -4.30 7.01
 14:1 237,586 -1.94 221,514 -0.69 16,072 -16.46 6.76

THE TRI-CITIES

During the January to March period, employment was higher by 0.5% in Bristol, but fell 1.6% in Johnson City and 1.2% in Kingsport. Matching the regional pattern, large numbers of unemployed workers are exiting the labor market in each city. This has lowered jobless levels by double digits, contracted the labor force, and reduced jobless rates. The percent of workers unemployed fell to 6.6% in Johnson City, 6.7% in Bristol, and 6.8% in Kingsport. As in the metro area, the lower jobless rates in each city are a result of weakness in the labor market.

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 32,890 -0.30 29,857 -4.37 3,032 71.64 9.22
 2010 33,133 0.74 30,130 0.91 3,004 -0.95 9.07
 2011 33,656 1.58 30,822 2.30 2,834 -5.66 8.42
 2012 33,049 -1.80 30,594 -0.74 2,455 -13.37 7.43
 2013 32,746 -0.92 30,305 -0.94 2,441  -0.57 7.45
 11:1 33,261 1.98 30,379 3.17 2,882 -9.02 8.67
 11:2 33,609 1.40 30,841 2.09 2,769 -5.70 8.24
 11:3 33,993 1.47 30,988 1.78 3,004 -1.59 8.84
 11:4 33,760 1.46 31,081 2.18 2,679 -6.23 7.94
 12:1 33,136 -0.37 30,603 0.74 2,534 -12.09 7.65
 12:2 33,207 -1.20 30,713 -0.42 2,494 -9.92 7.51
 12:3 33,129 -2.54 30,572 -1.34 2,558 -14.87 7.72
 12:4 32,723 -3.07 30,489 -1.90 2,234 -16.63 6.83
 13:1 32,727 -1.24 30,242 -1.18 2,484 -1.95 7.59
 13:2 32,899 -0.93 30,415 -0.97 2,484 -0.40 7.55
 13:3 32,856 -0.83 30,358 -0.70 2,498 -2.33 7.60
 13:4 32,502 -0.67 30,206 -0.93 2,296 2.80 7.07
 14:1 32,577 -0.46 30,404 0.53 2,173 -12.54 6.67
 

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 61,140 -0.47 55,490 -3.94 5,649 54.23 9.24
 2010 62,046 1.48 56,454 1.74 5,592 -1.02 9.01
 2011 62,492 0.72 57,241 1.39 5,250 -6.10 8.40
 2012 61,276 -1.95 56,781 -0.80 4,495 -14.39 7.34
 2013 59,071 -3.60 54,567 -3.90 4,504 0.20 7.62
 11:1 62,439 2.49 56,828 3.53 5,611 -7.03 8.99
 11:2 62,602 -0.08 57,155 -0.02 5,448  -0.78 8.70
 11:3 62,483 0.01 57,143 0.21 5,340 -2.01 8.55
 11:4 62,443 0.50 57,840 1.94 4,603 -14.62 7.37
 12:1 61,693 -1.19 57,065 0.42 4,628 -17.52 7.50
 12:2 61,455 -1.83 56,887 -0.47 4,568 -16.15 7.43
 12:3 60,802 -2.69 56,228 -1.60 4,574 -14.35 7.52
 12:4 61,154 -2.06 56,944 -1.55 4,209 -8.55 6.88
 13:1 59,547 -3.48 54,895 -3.80 4,652  0.52 7.81
 13:2 59,400 -3.35 54,760 -3.74 4,639 1.56 7.81
 13:3 58,824 -3.25 54,202 -3.60 4,622 1.05 7.86
 13:4 58,514 -4.32 54,411 -4.45 4,103 -2.53 7.01
 14:1 57,831 -2.88 54,043 -1.55 3,788 -18.58 6.55
 

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 50,761 -0.01 46,030 -3.95 4,731 66.40 9.32
 2010 51,033 0.54 46,452 0.92 4,481 -3.16 8.98
 2011 51,588 1.09 47,349 1.93 4,240 -7.45 8.22
 2012 50,509 -2.09 46,688 -1.39 3,821 -9.86 7.57
 2013 49,488 -2.02 45,735 -2.04 3,753 -1.79 7.58
 11:1 51,316  2.52 46,731 4.01 4,585 -10.58 8.93
 11:2 51,769 0.54 47,465 1.23 4,304 -6.44 8.31
 11:3 51,829 0.84 47,570 1.08 4,260 -1.76 8.22
 11:4 51,439 0.49 47,629 1.50 3,810 -10.57 7.41
 12:1 50,761 -1.08 46,700 -0.07 4,061 -11.43 8.00
 12:2 50,734 -2.00 46,885 -1.22 3,848 -10.59 7.59
 12:3 50,410 -2.74 46,592 -2.06 3,819 -10.35 7.57
 12:4 50,133 -2.54 46,575 -2.21 3,558 -6.62 7.10
 13:1 49,835 -1.82 45,871 -1.77 3,964 -2.39 7.95
 13:2 49,854 -1.73 45,980 -1.93 3,873 0.64 7.77
 13:3 49,488 -1.83 45,723 -1.86 3,764 -1.42 7.61
 13:4 48,774 -2.71 45,364 -2.60 3,411 -4.14 6.99
 14:1 48,621 -2.44 45,313 -1.22 3,308 -16.55 6.80

THE UNITED STATES

The pace of job creation in the national economy picked up during the winter months. On a year-to-year basis, national employment grew 1.5% to 144.2 million, marking the fourteenth quarter in a row of overall growth. The good news is that growth rate was above the critical threshold of one percent which is necessary to accommodate population growth. Unemployment levels fell 13.9% to 10.8 million, reducing the first quarter jobless rate to 6.9% (compared to 8.1% in 2013 and 8.6% in 2012.

Among the twelve national NAICS industry sectors, employment increased in ten and decreased in two sectors (compared to ten and two in the fourth quarter). Job gains were led by professional & business services, leisure & hospitality, education & health, retail trade, construction, and wholesale trade. Smaller employment increases occurred in transportation & utilities, manufacturing, financial services, and other services. Job losses occurred in information services and government 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
 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
 14:1 155,012 0.22 144,250 1.46 10,762 -13.90 6.94
  Note: Data are in thousands.

ANALYSIS

The labor market trends of 2013 continued into the first quarter of the New Year. The U.S. economy is creating new jobs while the Tri-Cities region is losing jobs. This divergent pattern has characterized the national and regional economies for the past two years.

In the U.S. labor market, employment grew 1.5% during the winter months, marking the fourteenth consecutive quarter of employment growth, and the best job creation performance in five quarters. At this rate, the national economy is again creating enough new jobs accommodate the annual one percent growth in the labor force, and to provide re-employment for some of the workers who have been idled since the Great Recession of 2008-09.

While the higher growth rate in national employment levels is welcome news, it still needs to higher. Some 7.4 million discouraged workers still remain out of the labor force due to the lingering effects of the Great Recession. If these long-term unemployed are added back into the labor force, the unemployment rate increases to 11.6%, compared to the 6.9% official rate. The lower “official” jobless rate is a very misleading statistic under these conditions.

In the region, employment has been falling for the last eight quarters. However, the rate of decline was only 0.7% in the first quarter, compared to a 2.4% decrease for 2013 as a whole. Perhaps we will soon see the bottom of this employment contraction in the local economy. Falling job levels has led to large numbers of workers ending their job search efforts and dropping out of the regional labor market. Thus the level of unemployment declines and the unemployment rate falls – usually a good thing – but actually a sign of market weakness when the labor force contracts.

Based on first quarter performance, the economic outlook has slightly improved. If the national economy continues to add jobs at the current rate, we will see a steady decline in long-term unemployment. And a stronger U.S. economy will also provide a boost to economic activity in the Tri-Cities region as well.

Technical Note. This report was prepared in May 2014, and is based upon the 2013 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.

New Annual Benchmark Data. This labor market report is based on the new 2013 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 2013 benchmark revisions cover the years 2009 to 2013.

 
 2012 Benchmark 2013 Benchmark
 Period  Level  Y-Y%Ch  Level  Y-Y%Ch 
 2008 233,510 0.36 233,510 0.36
 2009 223,402 -4.33 223,514 -4.28
  2010 225,930 1.13 226,089 1.15
 2011 230,033 1.82 230,095 1.77
 2012 229,216 -0.36 227,945 -0.93
 2013 225,589 -1.58 222,552 -2.37
 

The table compares the Tri-Cities metro area employment under the old 2012 benchmark and the new 2013 benchmark over the 2008 to 2013 period. The revisions for 2009, 2010, and 2011 are small, while the changes in 2012 and 2013 show larger job losses than previously reported.

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.