ETSU Bureau of Business and Economic Research

Tri-Cities Labor Market Report

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

THE METROPOLITAN AREA (CSA)

Depending upon the data source, we have either a negative view or a positive view of regional labor market performance. The negative view shows employment declining, and is based on data from the Current Population Survey (CPS) which is the source of the labor market data used in the tables in this report. The positive view shows employment increasing, and is based on data from the Current Employment Survey (CES) which is the source of employment data by NAICS industry sector for the metro area, and also shows total metro payroll employment.

First the CPS negative view. Labor market trends remained unchanged in the Tri-Cities Consolidated Statistical Area (CSA) in the fourth quarter. Compared to the same period in 2013, regional employment was lower by 0.9% to 219,562, while unemployment fell 16.0% to 14,051 as discouraged job seekers continued to abandon the regional labor force. The unemployment rate for the metro area was 6.0% (compared to 7.0% a year earlier). With the labor force shrinking by 2.0%, the falling jobless rate is a sign of labor market weakness.

The CPS annual data for 2014 reflect the ongoing decline in metro labor market conditions. Employment decreased by 0.9% to 220,463, well below the figures for 2010 and 2011. The number of jobless workers fell 15.6% to 15,459, pushing the unemployment rate down to 6.6%. Both these factors resulted in the labor force shrinking by 2.1% to 235,922.

Second, the positive view. According to the CES data, total payroll employment in the metro area has been increasing. In the fourth quarter, among the twelve regional NAICS industry sectors, employment levels were higher in six and lower in six (compared to six and six in the third quarter). Job growth was led by construction, leisure & hospitality, professional & business services, transport & utilities, and education & health services. Job losses occurred in government, retail trade, other services, financial services, information services, and manufacturing.

[CPS data] 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
 2014 235,922 -2.05 220,463 -0.94 15,459 -15.60 6.55
 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
 14:3 234,766 -2.46 218,110 -1.80 16,655 -10.38 7.09
 14:4 233,614 -1.98 219,562 -0.92 14,051 -15.95 6.01

THE TRI-CITIES

Based on CPS data, during the October to December period, employment declined again in all three cities - falling 1.5% in Johnson City, 1.1% in Kingsport, and 0.2% in Bristol. Matching the regional pattern, large numbers of unemployed workers continued to exit 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 5.8% in Bristol, 6.0% in Johnson City, and 6.1% in Kingsport. As in the metro area, the lower rates in each city reflect labor market weakness. The 2014 annual data for each city reflects the regional trends, with falling employment and unemployment resulting in a drop in the labor force numbers as well.

Bristol TN-VA Urbanized Area Labor Market

 
[CPS data] 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
 2014 32,394 -1.07 30,278 -0.09 2,116 -13.29 6.53
 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 32,297 -1.70 30,001  -1.18 2,296 -8.07 7.11
 14:4 31,983 -1.60 30,133 -0.24 1,850 -19.42 5.79
 

Johnson City Urbanized Area Labor Market

 
[CPS data] 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
 2014 57,426 -2.78 53,715 -1.56 3,711 -17.61 6.46
 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 57,088 -2.95 53,038 -2.15 4,051 -12.35 7.10
 14:4 57,014 -2.56 53,593 -1.50 3,420 -16.63 6.00
 

Kingsport Urbanized Area Labor Market

 
[CPS data] 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
 2014 48,330 -2.34 45,152 -1.27 3,178 -15.33 6.58
 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 48,091 -2.82 44,705 -2.23 3,386 -10.05 7.04
 14:4 47,813 -1.97 44,886 -1.05 2,927 -14.19 6.12

THE UNITED STATES

Based on fourth quarter CPS data, labor market conditions improved significantly in the national economy. Employment rose 2.2% to 147.6 million, marking the highest rate of job creation since the end of the 2008-09 Great Recession. Unemployment fell 17.4% to 8.5 million and the jobless percentage declined to 5.5% (compared to 6.7% in 2013 and 7.5% in 2012). Employment levels have been rising for the past seventeen quarters, and during twelve of the last thirteen quarters, the rate of job growth was above the critical one percent threshold which is necessary to accommodate population expansion.

The 2014 annual data reflect these positive trends. Compared to 2013, the number of jobholders increased by 1.6% pushing the job count to 146.3 million. Unemployment for the year was 9.6 million, or 16.1% below 2013 levels. The annual jobless rate fell to 6.2% compared to 7.4% a year earlier. The bottom line for 2014 is that U.S. employment levels have finally exceeded the pre-recession highpoint in 2007. Unfortunately, over the past seven years, population growth has created a large pool of workers who still remain outside the labor force.

The fourth quarter CES employment data are consistent with the CPS data, and show employment increasing in all twelve of the national NAICS industry sectors (compared to gains in eleven sectors and unchanged in one for the third quarter). Job gains were led by professional & business services, education & health, leisure & hospitality, construction, retail trade, manufacturing, and transportation & utilities. Smaller employment increases occurred in financial services, wholesale trade, government, other services, and information services.

 
[CPS data] 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
 2014 155,922 0.34 146,305 1.65 9,616 -16.09 6.17
  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
 14:4 156,144 0.87 147,597 2.18 8,547 -17.36 5.47
 Note: Data are in thousands.

ANALYSIS

The national economy achieved a significant milestone in 2014. Based on CPS data, employment in the United States is now the highest level in history, exceeding the previous highpoint in 2007. However, 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 in the national labor force. Since 2007, this has added eight million potential workers to the economy who remain outside of the “official” labor force numbers. The official unemployment rate for 2014 is 6.2%, but if the missing eight million discouraged workers are included, then the effective unemployment rate remains in double digits at 10.7%.

Looking ahead, the national economy is expected to continue its steady growth. Recent data on employment, production, and retailing are consistent with this outlook. However at the present employment growth rate, we are looking at six to seven years before the eight million missing workers are finally added to the employment rolls.

Tri-Cities CSA Labor Market Employment

 
 Establishment Household 
 Survey (CES) Survey (CPS) 
 Period  Level  Y-Y%Ch  Level  Y-Y%Ch 
 2007 203,808 0.56 232,670 1.01 
 2008 204,350 0.27 233,509 0.36 
 2009 195,783 -4.34 223,514 -4.28 
 2010 194,167 -0.67 226,088 1.15 
  2011 197,517 1.73 230,095 1.77 
 2012 198,033 0.26 227,946 -0.93 
 2013 197,050 -0.50 222,551 -2.37 
 2014 197,550 0.25 220,763 -0.94  

In the Tri-Cities metro area, we have conflicting data. According to the CPS data, employment has been falling for the last eleven quarters, causing many unsuccessful job seekers to drop out of the area labor force. These workers may end their job search and remain in the area, or they may relocate to other areas where employment prospects are better. 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. But according to the CES data (which is only available for the metro area), employment has been expanding during 2014.

Usually the CPS and CES data show similar changes, but in 2014 we have a divergence. This raises the question of the relative accuracy of the two sources. In the third quarter retail sales report, we saw an increase in retail activity which was not matched by labor market data (from the CPS). The retail data available for the fourth quarter show a similar paradox. If we match the retail data (based on tax collections) to the CES regional data, the paradox vanishes. So apparently for 2014, the better source of employment data is the CES series.

Having said that, this creates a question on the accuracy of the CPS employment data for the county and city labor markets (which are used in the tables in this report). Each year the Bureau of Labor Statistics revises (“benchmarks”) the regional and local CPS labor market data. It will be interesting to see whether the next benchmark shows a different 2014 employment pattern.

Data Sources: This report is based on two monthly data surveys from the U.S. Bureau of Labor Statistics (BLS). The data used for the labor market tables 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. The CPS provides labor market data for the nation, states, counties, and cities. 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”. The CES provides payroll employment data for the nation, states, and metropolitan areas.

Technical Note. This report was prepared in February 2015, 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.