ETSU Bureau of Business and Economic Research

Tri-Cities Labor Market Report

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

Announcement: This report is the last release in the current BBER labor market report series for the Tri-Cities. Please refer to the note at the end of the report.

THE METROPOLITAN AREA (CSA)

The strong employment growth in the spring and summer months continued into the fall quarter. Based on the household data from the Current Population Survey (CPS), regional employment grew 2.6% during the October to December period. The companion payroll data from the Current Employment Survey (CES) puts the metro employment growth at 1.5% on a year-to-year basis. The last three quarters simply represent the best regional labor market performance since the Great Recession of 2008-09.

According to the Current Population Survey, metro employment levels increased 2.6% to 216,377. Unemployment fell 10.8% to 12,346, reducing the jobless rate to 5.4% (compared to 6.2% in 2014 and 6.9% in 2013). The overall labor force expanded by 1.8% to 228,723. The Current Employment Survey shows payroll employment rising to 204,733, or 1.5% above 2014 levels.

The CPS annual data for 2015 clearly show the turnaround in the Tri-Cities metro labor market conditions. Employment increased by 1.8% to 215,895, marking the first significant job growth since 2011. The number of unemployed workers fell 10.4% to 13,579, reducing the jobless rate to 5.9%, the lowest rate since 2008.

Among the twelve regional NAICS industry sectors covered by the CES, employment levels were higher in seven, lower in three, and unchanged in two (compared to higher in seven, lower in one, and unchanged in four sectors in the third quarter). Job growth was led by retail trade, leisure & hospitality, and professional & business services. Smaller job gains were reported by government, wholesale trade, transport & utilities, and education & health services. Job declines occurred in manufacturing, information services, and other services.. Employment was unchanged in financial services, and construction.

 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
 2015 229,474 0.99 215,895 1.80 13,579 -10.39 5.92
 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
 15:2 232,449 1.90 218,872 2.68 13,577 -9.25 5.84
 15:3 228,692 0.70 214,878 1.84 13,814 -14.21 6.04
 15:4 228,723 1.75 216,377 2.57 12,346 -10.81 5.40

THE TRI-CITIES

All three cities continued to participate in the regional labor market performance. During the autumn months, employment grew 3.2% in Kingsport, 2.8% in Johnson City, and 1.9% in Bristol. Unemployment fell by 13.6% in Bristol, 10.2% in Kingsport, and 9.3% in Johnson City. The lowest unemployment rate was reported by Bristol at 4.9%, followed by Kingsport at 5.5% and Johnson City at 5.5%. The 2015 annual data for each city reflects the improving regional trends, with rising employment and lower unemployment resulting in a drop in the jobless percentage.

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
 2015 31,768 0.27 30,015 1.19 1,753 -13.16 5.52
 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 32,110 0.88 30,818 1.72 1,792 -11.48 5.58
 15:3 31,647 -0.12 29,888 1.15 1,759 -17.62 5.56
 15:4 31,638 1.02 30,079 1.91 1,559 -13.62 4.93

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
 2015 55,203 1.57 51,876 2.29 3,327 -8.46 6.03
 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 55,991 2.80 52,688 3.53 3,303 -7.61 5.90
 15:3 54,923 1.36 51,490 2.43 3,433 -12.40 6.25
 15:4 55,099 2.04 52,052 2.79 3,047 -9.34 5.53

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
 2015 47,465 1.23 44,614 2.01 2,851 -9.66 6.01
 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 48,143 2.09 45,309 2.89 2,834 -9.19 5.89
 15:3 47,361 0.94 44,428 2.02 2,933 -13.00 6.19
 15:4 47,361 2.39 44,747 3.23 2,615 -10.15 5.52

THE UNITED STATES

Labor market conditions continued to improve in the United States during the fourth quarter. Based on the CPS household survey, employment rose 1.4% to 149.7 million, while unemployment fell 11.4% to 7.6 million and the jobless rate declined to 4.8% (compared to 5.5% in 2014 and 6.7% in 2013). Employment levels have been rising for the past twenty-one quarters, and during sixteen of the last seventeen quarters, the rate of job growth has been above the critical one percent threshold which is necessary to accommodate population expansion.

The 2015 annual data reflect these positive trends. Compared to 2014, the number of jobholders increased by 1.7% pushing the job count to 148.8 million. Unemployment for the year averaged 8.3 million, or 13.7% below 2014 levels. The annual jobless rate fell to 5.3% compared to 6.2% a year earlier. The bottom line for 2015 is that U.S. employment levels now stand 2.8 million above the pre-recession highpoint in 2007. Unfortunately, over the past eight years, population growth has created a large pool of nine million workers who still remain outside the labor force.

Turning to the CES data, national payroll employment increased by 2.0% to 144.0 million in the fourth quarter. And all twelve NAICS industry sectors again reported higher job levels. The largest employment gains were in education & health, professional & business services, leisure & hospitality, and retail trade. Smaller employment growth occurred in mining & construction, financial services, transportation & utilities, government, wholesale trade, other services, manufacturing, and 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
 2014 155,922 0.34 146,305 1.65 9,616 -16.09 6.17
 2015 157,130 0.77 148,833 1.73  8,296 -13.73 5.28
 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
 15:3 157,508 0.56 149,310 1.61 8,198 -15.35 5.21
 15:4 157,299 0.74 149,728 1.44 7,571 -11.42 4.81
 Note: Data are in thousands.

ANALYSIS

For the third quarter in a row, all of the markets covered in this report show higher employment, lower unemployment, and reduced jobless rates. Overall, current labor market conditions are the best since the Great Recession of 2008-09.

At the national level, employment has increased for the past five years, and the rate of job creation shows no sign of a slowdown. The following table shows annual employment data as reported by both the wage survey (CES) and the household survey (CPS). In 2015, CES based employment was 141.9 million, and was 11.5 million jobs above the pre-recession highpoint in 2007. The CPS figures show a similar pattern. Household employment in 2015 reached 148.8 million, some 9.7 million jobs higher than in 2007. Both measures tell essentially the same story – five consecutive years of job growth, and continuing strength in job creation.

USA Labor Market Employment

(In Thousands)

 
 Establishment Household 
 Survey (CES) Survey (CPS) 
 Period  Level  Y-Y%Ch  Level  Y-Y%Ch 
 2007 137,999 1.13 146,047 1.12 
 2008 137,742 -0.55 145,362 -0.47 
 2009 131,313 -4.32 139,878 -3.77 
 2010 130,361 -0.72 139,064 -0.58 
 2011 131,932 1.20 139,869 0.58 
 2012 134,175 1.70 142,469 1.86 
 2013  136,381 1.64 143,929 1.02 
 2014 138,958 1.89 146,305 1.65 
 2015 141,865 2.09 148,838 1.73 
 

The employment growth parade, however, omits one critical element. The annual one percent growth rate in population has added millions of potential workers to the national labor pool since 2007. The American economy has not created enough new jobs fast enough to provide employment for all of these added workers. If we were at true full employment, then the CPS household data would show 157.5 million Americans at work, but instead there were only 148.8 million jobs in 2015. If the missing 8.7 million workers are added into the labor force statistics as being unemployed, then the effective jobless rate is 10.2% rather that the official rate of 5.3%.

At the regional level, the two employment series are very inconsistent, as we have discovered in previous reports. The wage-based CES data shows continuous job growth since 2010, and this is consistent with the national employment data. Regional employment in 2015 was 201,608, still some 1,417 below the regional employment highpoint in 2008. The household CPS data are very different. Since 2010, this series shows one year up, three years down, and finally an up year in 2015. The metro CPS employment in 2015 is 215,901, some 20,208 jobs below the highpoint in 2007. The two series are supposed to measure the same type of local economic activity – the number of people gainfully employed. Obviously, one series is bad and one series is good.

The preferred series of course is the establishment based payroll survey (CES). The metro data is consistent with the national jobs data, is consistent with area retail sales, and has been little changed in the annual revision process. In contrast, the CPS regional jobs data do not match the national pattern, are not consistent with the area retail data, and have been massively revised over the past two annual revision cycles (“benchmarking”). For purposes of local decision making, the wage data is the only reliable source.

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 
 2015 201,608 1.52 215,901 1.80 
 

These overall trends are expected to continue in the national and regional labor markets. The U.S. economy should expand production and the demand for labor above the one percent rate of annual population growth. This will slowly add the nearly nine million missing workers back into the productive labor force and reduce the number of families on welfare. The effect on government budget finances could be significant. The regional economy also has a good outlook. The Tri-Cities area is now clearly a part of the national business expansion, and as long as the U.S. economy grows, the regional economy will prosper. And higher local incomes will provide the basis for continued growth in retail activity.

Last Report Note. Effective with this report, Dr. F. Steb Hipple is retiring, so this will be the last entry in the current BBER labor market report series for the Tri-Cities. The first report was issued in 1984, and the series has been issued continuously for the past thirty-two years. Contact the Bureau for information regarding future labor market reports.

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 February 2016, 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.