ETSU Bureau of Business and Economic Research

Tri-Cities Labor Market Report

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

THE METROPOLITAN AREA (CSA)

Existing labor market trends dominated the Tri-Cities Consolidated Statistical Area (CSA) in the third quarter. Compared to the same period in 2013, regional employment was lower by 1.7% to 218,244, while unemployment fell 10.3% to 16,664 as discouraged job seekers continued to leave the regional labor force. The summer unemployment rate for the metro area was 7.1% (compared to 7.7% a year earlier). With the labor force shrinking by 2.4%, the falling jobless rate is a sign of labor market weakness.

Among the twelve regional NAICS industry sectors, employment levels were higher in six, lower in six, and unchanged in none (compared to six, four, and two in the second quarter). Job growth was led by construction, professional & business services, other services, and education & health services. Smaller employment gains were reported by transport & utilities, and leisure & hospitality. Major job losses occurred in retail trade, government, and manufacturing. Small employment declines were reported by wholesale trade, information services, and financial services. Overall, the private sector in the metro area saw modest job growth.

 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
 14:1 237,591 -1.94 221,524 -0.69 16,067 -16.49 6.76
 14:2 237,717 -1.84 222,653 -0.35 15,061 -19.55 6.34
 14:3 234,908 -2.40 218,244 -1.74 16,664 -10.33 7.09

THE TRI-CITIES

During the July to September period, employment was lower in all three cities - falling 2.2% in Kingsport, 2.0% in Johnson City, and 1.2% in Bristol. Matching the regional pattern, large numbers of unemployed workers are exiting the labor market in each city. This has lowered the jobless counts, contracted the labor force, and reduced the unemployment rates. The percent of workers unemployed was 7.0% in Kingsport, 7.1% in Johnson City, and 7.1% in Bristol. As in the metro area, the lower rates in each city reflect labor market weakness.

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 32,579 -0.45 30,408 0.55 2,171 -12.60 6.66
 14:2 32,717 -0.55 30,570 0.51 2,147 -13.56 6.56
 14:3 32,302 -1.69 30,003 -1.17 2,298 -7.99 7.12
 

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 57,824 -2.89 54,036 -1.56 3,788 -18.58 6.55
 14:2 57,779 -2.73 54,195 -1.03 3,584 -22.74 6.20
 14:3 57,160 -2.83 53,108 -2.02 4,052 -12.32 7.09
 

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 48,630 -2.42 45,323 -1.20 3,307 -16.56 6.80
 14:2 48,787 -2.14 45,697 -0.62 3,091 -20.21 6.33
  14:3 48,105 -2.79 44,717 -2.20 3,388 -10.00 7.04

THE UNITED STATES

Labor market conditions continued to improve in the national economy with employment rising 1.5% to 146.9 million and unemployment decreasing 15.6% to 9.7 million. The third quarter jobless rate was 6.2%, compared to 7.3% in 2013 and 8.1% in 2012.

Employment has been rising for the past sixteen quarters, and during eleven of the last twelve quarters, the rate of job creation was above the critical threshold of one percent which is necessary to accommodate population expansion. The three consecutive quarters of significant job growth in 2014 mark the best labor market performance since 2012.

Among the twelve national NAICS industry sectors, employment increased in eleven sectors and was unchanged in one (compared to gains in eleven sectors and a decline in one in the second quarter). Job gains were led by professional & business services, education & health, leisure & hospitality, construction, and retail trade. Smaller employment increases occurred in manufacturing, transportation & utilities, wholesale trade, financial services, other services, and government. Job levels were unchanged in information services.

 
 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
 14:2 155,895 0.03 146,423 1.45 9,472 -17.79 6.08
 14:3 156,636 0.26 146,951 1.52 9,685 -15.61 6.18
 Note: Data are in thousands.

ANALYSIS

During the summer months, there was no change in the labor market trends have shaped the national and regional labor market picture for the past two years. The U.S. economy is creating new jobs at a significant rate while the Tri-Cities region continues to shed jobs. Ultimately, the strength of the national economy will cause a turnaround in Tri-Cities business conditions. The question is when?

As discussed in previous reports, the long run growth rate of the U.S. population is one percent, and this carries over into a one percent annual growth rate of the national labor force. The above data show that national employment has been rising by more than one percent in ten of the past eleven quarters. Job creation in the first nine months of 2014 has averaged 1.5%, which is the best performance since 2012. These new jobs will accommodate the natural growth of the labor force, and provide re-employment for some of the workers who have been idled since the Great Recession of 2008-09.

The effects of the Great Recession continue to linger in the national economy. During the third quarter, the official employment level for the United States was 146.9 million. This is 9.6 million jobs short of the “full employment” level of 156.5 million. If these missing workers are added back into the labor force, the “effective unemployment rate” increases to 10.8%, compared to the 6.2% official rate.

In the region, employment has been falling for the last ten quarters, causing many unsuccessful job seekers to leave the Tri-Cities CSA and relocate to other areas. As a result, the level of unemployment declines, the unemployment rate falls, and the labor force becomes smaller. Taken together, these are signs of a weak regional economy.

Looking ahead, the national economy is expected to continue its slow but steady growth. Recent data on employment, production, and retailing are consistent with this scenario. The Tri-Cities economy continues to be mired in a business slowdown which is shown in the regional data for employment and retail activity. We continue to wait for the strengthening U.S. economy to provide a boost to business conditions in our region.

Technical Note. This report was prepared in November 2014, and is based upon the 2013 benchmark of the Current Population Survey, U.S. Bureau of Labor Statistics (BLS). 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.