ETSU Bureau of Business and Economic Research

Tri-Cities Labor Market Report

East Tennessee State University + Second Quarter 2015 + College of Business and Technology

THE METROPOLITAN AREA (CSA)

The second quarter labor market performance in the Tri-Cities was the best in several years, based on both the Current Population Survey (CPS) and the Current Employment Survey (CES). According to the CPS household data, regional employment grew 2.7% in the spring period. The CES payroll data puts employment growth at 1.9%. This is the first time in three years that both indicators are telling the same story.

According to the Current Population Survey, employment levels jumped 2.7% to 218,921 – reversing three years of decline. Unemployment fell 9.1% to 13,593 and the jobless rate for the metro area was 5.9% (compared to 6.6% in 2014 and 7.8% in 2013). Responding to higher employment levels, the labor force expanded by 1.9% to 232,514. Taken together, these CPS data show labor market strength.

Over the past three years, the Current Employment Survey has been the more accurate measure of regional labor market conditions, and has shown steady if modest employment growth. Among the twelve regional NAICS industry sectors, employment levels were higher in seven, lower in three, and unchanged in two (compared to higher in eight, lower in one, and unchanged in three sectors in the first quarter). Job growth was led by leisure & hospitality, professional & business services, retail trade, education & health services, and manufacturing. Smaller job gains were reported by government, and transport & utilities. Small job losses occurred in construction, information services, and other services. Employment was unchanged in wholesale trade and financial services.

   Labor Force Employment Unemployment
 Period  Level  Y-Y%Ch  Level  Y-Y%Ch  Level  Y-Y%Ch  Rate_
 2007 244,704 0.45 234,109 0.92 10,595 -8.87 4.33
 2008 247,668 1.21 233,447 -0.28 14,222 34.22 5.74
 2009 247,965 0.12 224,752 -3.72 23,213 63.22 9.36
 2010 239,478 -3.42 217,213 -3.35 22,265 -4.08 9.30
 2011 242,277 1.17 221,769 2.10 20,509 -7.89 8.47
 2012 237,986 -1.77 219,844 -0.87 18,142 -11.54 7.62
 2013 233,616 -1.84 215,816 -1.83 17,799 -1.89 7.62
 2014 227,230 -2.73 212,077 -1.73 15,153 -14.87  6.67
 12:1 238,808 -1.07 219,952 0.34 18,857 -14.93 7.90
 12:2 239,040 -1.72 220,730 -0.69 18,310 -12.68 7.66
 12:3 237,329 -2.21 218,873 -1.38 18,456 -11.01 7.78
 12:4 236,765 -2.09 219,821 -1.71 16,944 -6.70 7.16
 13:1 235,861 -1.23 216,809 -1.43 19,052 1.04 8.08
 13:2 235,740 -1.38 217,425 -1.50 18,315 0.03 7.77
 13:3 233,332 -1.68 215,427 -1.57 17,906 -2.98  7.67
 13:4 229,529 -3.06 213,604 -2.83 15,925 -6.01 6.94
 14:1 228,911 -2.95 213,204 -1.66 15,707 -17.56 6.86
 14:2 228,113 -3.24 213,153 -1.97 14,960 -18.32 6.56
 14:3 227,096 -2.67 210,994 -2.06 16,102 -10.07 7.09
 14:4 224,799 -2.06 210,957 -1.24 13,842 -13.08 6.16
 15:1 228,032 -0.38 213,454 0.12 14,578 -7.19 6.39
 15:2 232,514 1.93 218,921 2.71 13,593 -9.14 5.85

THE TRI-CITIES

Reflecting regional conditions, all three cities saw significant increases in job levels during the second quarter. After three years of declining (as measured by the CPS data), employment grew 3.6% in Johnson City, 2.9% in Kingsport, and 1.8% in Bristol. Driven by job gains, unemployment fell in each city, reducing the unemployment rates to 5.6% in Bristol, 5.9% in Johnson City, and 5.9% in Kingsport. The labor force grew in each urban labor market. Taken together, these CPS data show labor market strength.

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 32,481 0.22 31,055 0.38 1,426 -3.03 4.39
 2008 32,960 1.48 31,205 0.48 1,755 23.10 5.32
 2009 32,931 -0.09 29,962 -3.99 2,969 69.19 9.02
 2010 32,590 -1.03 29,745 -0.72 2,845 -4.19 8.73
 2011 33,114 1.61 30,461 2.41 2,653 -6.75 8.01
 2012 32,638 -1.44 30,263 -0.65 2,375 -10.49 7.28
 2013 32,178 -1.41 29,882 -1.26 2,296 -3.29 7.14
 2014 31,682 -1.54 29,663 -0.73 2,019 -12.09 6.37
 12:1 32,742 -0.15 30,231 0.68 2,511 -9.24 7.67
 12:2 32,782 -1.24 30,393 -0.54 2,389 -9.34 7.29
 12:3 32,607 -2.05 30,188 -1.17 2,419 -11.82 7.42
 12:4 32,420 -2.30 30,241 -1.55 2,179 -11.63 6.72
 13:1 32,310 -1.32 29,885 -1.14 2,425 -3.43 7.50
 13:2 32,422 -1.10 30,089 -1.00 2,333 -2.34 7.20
 13:3 32,210 -1.22 29,904 -0.94 2,306 -4.69 7.16
 13:4 31,771 -2.00 29,649 -1.96 2,122 -2.61 6.68
 14:1 31,896 -1.28 29,785 -0.33 2,110 -12.97 6.62
 14:2 31,829 -1.83 29,804 -0.95 2,025 -13.21 6.36
  14:3 31,684 -1.63 29,549 -1.19 2,135 -7.39 6.74
 14:4 31,319 -1.42 29,514 -0.45 1,805 -14.95 5.76
 15:1 31,679 -0.68 29,777 -0.03 1,902 -9.88 6.00
 15:2 32,122 0.92 30,326 1.75 1,797 -11.27 5.59
 

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 60,977 1.53 58,372 1.96 2,605 -7.22 4.27
 2008 61,391 0.68 57,761 -1.05 3,629 39.30 5.91
 2009 61,505 0.19 55,868 -3.28 5,637 55.32 9.17
 2010 58,250 -5.29 52,830 -5.44 5,419 -3.86 9.30
 2011 58,792 0.93 53,777 1.79 5,015 -7.46 8.53
 2012 57,709 -1.84 53,387 -0.73 4,322 -13.82 7.49
 2013 56,262 -2.51 51,959 -2.68 4,303 -0.43 7.65
 2014 54,351 -3.40 50,716 -2.39 3,635 -15.53 6.69
 12:1 57,992 -1.46 53,549 0.35 4,443 -19.05 7.66
 12:2 57,921 -1.74 53,533 -0.45 4,388 -15.21 7.58
 12:3 57,321 -2.32 52,903 -1.36 4,418 -12.50 7.71
 12:4 57,604 -1.85 53,565 -1.43 4,039 -7.10 7.01
 13:1 57,053 -1.62 52,468 -2.02 4,585 3.21 8.04
 13:2 56,784 -1.96 52,307 -2.29 4,477 2.02 7.88
 13:3 55,923 -2.44 51,563 -2.53 4,360 -1.32 7.80
 13:4 55,290 -4.02 51,498 -3.86 3,791 -6.13 6.86
 14:1 54,752 -4.03 51,069 -2.67 3,683 -19.67 6.73
 14:2 54,464 -4.08 50,889 -2.71 3,575 -20.14 6.56
 14:3 54,188 -3.10 50,268 -2.51 3,919 -10.10 7.23
 14:4 53,998 -2.34 50,637 -1.67 3,361 -11.34 6.23
 15:1 54,800 0.09 51,274 0.40 3,526 -4.28 6.43
 15:2 56,008 2.83 52,702 3.56 3,305 -7.54 5.90
 

Kingsport Urbanized Area Labor Market

 
   Labor Force Employment Unemployment
 Period  Level  Y-Y%Ch  Level  Y-Y%Ch  Level  Y-Y%Ch  Rate_
 2007 50,171 -0.34 48,115 0.34 2,056 -14.07 4.10
 2008 50,734 1.12 47,916 -0.41 2,818 37.08 5.55
 2009 51,046 0.62 46,333 -3.30 4,713 67.27 9.23
 2010 49,718 -2.60 45,094 -2.67 4,624 -1.90 9.30
 2011 50,379 1.33 46,124 2.28 4,256 -7.97 8.45
 2012 49,339 -2.07 45,569 -1.20 3,770 -11.41 7.64
 2013 48,460 -1.78 44,745 -1.81 3,715 -1.46 7.67
 2014 46,888 -3.24 43,733 -2.26 3,156 -15.05 6.73
 12:1 49,408 -1.36 45,510 0.04 3,898 -15.17 7.89
 12:2 49,580 -2.11 45,758 -1.14 3,822 -12.40 7.71
 12:3 49,353 -2.43 45,501 -1.65 3,852 -10.74 7.81
 12:4 49,013 -2.37 45,506 -2.04 3,507 -6.43 7.16
 13:1 48,918 -0.99 44,974 -1.18 3,944 1.18 8.06
 13:2 48,984 -1.20 45,131 -1.37 3,853 0.79 7.87
 13:3 48,501 -1.73 44,751 -1.65 3,750 -2.65 7.73
 13:4 47,436 -3.22 44,124 -3.04 3,312 -5.55 6.98
 14:1 47,219 -3.47 43,997 -2.17 3,222 -18.31 6.82
 14:2 47,158 -3.73 44,037 -2.42 3,120 -19.01 6.62
  14:3 46,919 -3.26 43,548 -2.69 3,371 -10.12 7.18
 14:4 46,258 -2.48 43,348 -1.76 2,910 -12.14 6.29
 15:1 46,993 -0.48 43,970 -0.06 3,023 -6.18 6.43
 15:2 48,149 2.10 45,313 2.90 2,836 -9.11 5.89

THE UNITED STATES

Building on the strong performance of the fall and winter quarters, the national economy continued to expand in the spring months. Based on the CPS household survey, employment rose 1.9% to 149.2 million, unemployment fell 12.1% to 8.3 million, and the jobless percentage declined to 5.3% (compared to 6.1% in 2014 and 7.4% in 2013). Employment levels have been rising for the past nineteen quarters, and during fourteen of the last fifteen quarters, the rate of job growth was above the critical one percent threshold which is necessary to accommodate population expansion. Taken together, the last three quarters mark the highest rate of job creation since the end of the 2008-09 Great Recession.

The second quarter CES payroll data are consistent with the CPS data, and show continued employment growth across all twelve of the national NAICS industry sectors. Job gains were led by professional & business services, education & health, leisure & hospitality, retail trade, and construction. Smaller employment increases occurred in manufacturing, financial services, transportation & utilities, government, wholesale trade, information services, and other 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
 2014 155,922 0.34 146,305 1.65 9,616 -16.09 6.17
 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
 15:1 156,193 0.76 147,102 1.98 9,092 -15.52 5.82
 15:2 157,518 1.04 149,194 1.89 8,325 -12.11 5.28
 Note: Data are in thousands.

ANALYSIS

During the second quarter, all of the markets covered in this report showed significantly higher employment numbers. In the United States, job growth continued its impressive multiyear expansion above the rate of population growth. At the metropolitan level, both employment data sources are consistent and reveal significant job growth. Overall, the current labor market performance is the best since 2011.

The most noteworthy story is that the regional CPS and CES jobs data are now singing the same song. In the third quarter of 2014, the region saw a large jump in retail sales while the reported CPS employment levels continued to decline. Fewer jobs means fewer paychecks and is not consistent with significant retail growth, so there was a search for the “missing jobs”. The Current Employment Survey provides a second data source for metro employment, and this source showed the employment growth behind the retail turnaround.

Since last summer, these labor market reports have discussed and compared both the CPS and CES data. The first quarter report concluded that the payroll data is more accurate since it matches changes in retail activity. The following table compares employment data for the Tri-Cities metro area from both the household and payroll surveys.

Tri-Cities CSA Labor Market Employment

 
 Establishment Household 
 Survey (CES) Survey (CPS) 
 Period  Level  Y-Y%Ch  Level  Y-Y%Ch 
  2007 202,225 0.69 234,109 0.92 
 2008 203,025 0.40 233,447 -0.28 
 2009 194,275 -4.31 224,752 -3.72 
 2010 192,850 -0.73 217,213 -3.35  
 2011 196,325 1.80 221,769 2.10 
 2012 197,133 0.41 219,844 -0.87 
 2013 197,408 0.14 215,816 -1.83 
 2014 198,583 0.60 212,077 -1.73 

In the Tri-Cities metro area, second quarter employment growth was impressive. The CPS put the year-to-year jump at 2.7% while the CES figure was 1.9%. We last saw this level of increase in 2011. The regional economy is now finally getting the long anticipated boost from the ongoing national economic expansion.

Turning to the national economy, and according to the CPS household survey, employment in the United States is now at the highest level in history, exceeding the prerecession highpoint in 2007 by three million jobs. 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 potential labor force. Since 2007, population growth has added eleven million potential workers to the economy, and eight million still remain outside of the “official” labor force numbers. The official unemployment rate for the second quarter is 5.3%, but if the missing 8.3 million workers are included, then the effective unemployment rate is 9.9%. 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 and the economy is at true full employment.

Looking ahead, the national economy is expected to continue its overall expansion above the rate of population growth. This will slowly add the eight million missing workers back into the productive labor force and reduce the number of families on welfare. The effect on government budget deficits could be significant. The regional economy also has a good outlook. The Tri-Cities area is now clearly plugged into the national expansion, and as long as the U.S. economy grows, our regional economy will prosper. Higher local incomes will provide the basis for continued retail growth.

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 information 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 on the Tables. This report was prepared in August 2015, and is based upon the 2014 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.