ETSU Bureau of Business and Economic Research

Tri-Cities Labor Market Report

East Tennessee State University + First Quarter 2016 + 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)

Both employment series showed strong growth in the Tri-Cities metro area. According to the household data from the Current Population Survey (CPS), regional employment grew 2.3% during the January to March period. The payroll data from the Current Employment Survey (CES) puts the metro employment growth at 1.9% on a year-to-year basis.

In the Current Population Survey, metro employment levels increased 2.3% to 216,008. Unemployment fell 21.0% to 11,151, reducing the jobless rate to 4.9% (compared to 6.3% in 2015 and 6.9% in 2014). The overall labor force expanded by 0.8% to 227,158. The Current Employment Survey shows payroll employment rising to 200,233, or 1.9% above 2015 levels.

Among the twelve regional NAICS industry sectors covered by the CES, employment levels were higher in six, lower in two, and unchanged in four (compared to higher in seven, lower in three, and unchanged in two sectors in the fourth quarter). Job growth was led by retail trade, leisure & hospitality, and education & health services. Smaller job gains were reported by professional & business services, financial services, and government. Job declines occurred in information services, and wholesale trade, Employment was unchanged in manufacturing, transport & utilities, other 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 242,010 1.06 221,426 1.94 20,584 -7.55 8.51
 2012 237,563 -1.84 219,319 -0.95 18,244 -11.37 7.68
 2013 233,381 -1.76 215,472 -1.75 17,910 -1.83 7.67
 2014 228,229 -2.21 213,146 -1.08 15,083 -15.78 6.61
 2015 225,614 -1.15 212,301 -0.40 13,312 -11.74 5.90
 13:1 235,444 -1.27 216,235 -1.50 19,209 1.43 8.16
 13:2 235,362 -1.38 216,972 -1.51 18,391 0.15 7.81
 13:3 233,137 -1.60 215,122 -1.47 18,016 -3.05 7.73
 13:4 229,582 -2.81 213,559 -2.54 16,023 -6.26 6.98
 14:1 229,344 -2.59 213,561 -1.24 15,783 -17.84 6.88
 14:2 228,956 -2.72 214,024 -1.36 14,932 -18.81 6.52
 14:3 228,561 -1.96 212,510 -1.21 16,051 -10.91 7.02
 14:4 226,054 -1.54 212,487 -0.50 13,566 -15.33 6.00
 15:1 225,366 -1.73 211,250 -1.08 14,116 -10.56 6.26
 15:2 226,390 -1.12 212,969 -0.49 13,421 -10.12 5.93
 15:3 225,159 -1.49 211,687 -0.39 13,472 -16.07 5.98
 15:4 225,539 -0.23 213,298 0.38 12,241 -9.77 5.43
 16:1 227,158 0.80 216,008 2.25 11,151 -21.01 4.91

THE TRI-CITIES

All three cities enjoyed strong employment growth in the winter months, according to the CPS estimates. During the first quarter, employment grew 2.9% in Kingsport, 2.4% in Johnson City, and 1.8% in Bristol. On a year-to-year basis, unemployment fell by 22.9% in Johnson City, 21.9% in Kingsport, and 19.7% in Bristol. In an unusual occurrence, all three cities reported the same unemployment rate of 4.8%.

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 33,078 1.50 30,424 2.28 2,654 -6.70 8.02
 2012  32,574 -1.53 30,204 -0.72 2,369 -10.73 7.27
 2013 32,125 -1.38 29,834 -1.22 2,291 -3.31 7.13
 2014 31,631 -1.54 29,629 -0.69 2,002 -12.61 6.33
 2015 31,109 -1.65 29,395 -0.79 1,714 -14.37 5.51
 13:1 32,240 -1.37 29,818 -1.20 2,422 -3.47 7.51
 13:2 32,353 -1.13 30,026 -1.03 2,327 -2.36 7.19
 13:3 32,162 -1.17 29,862 -0.90 2,299 -4.61 7.15
 13:4  31,746 -1.84 29,631 -1.77 2,115 -2.74 6.66
 14:1 31,843 -1.23 29,744 -0.25 2,099 -13.34 6.59
 14:2 31,807 -1.69 29,797 -0.76 2,010 -13.61 6.32
 14:3 31,645 -1.61 29,526 -1.13 2,120 -7.81 6.70
 14:4 31,228 -1.63 29,449 -0.62 1,779 -15.88 5.70
 15:1 31,135 -2.22 29,281 -1.56 1,854 -11.66 5.96
 15:2 31,219 -1.85 29,785 -1.05 1,735 -13.71 5.56
 15:3  30,991 -2.07 29,267 -0.88 1,724 -18.67 5.56
 15:4 31,092 -0.44 29,547 0.33 1,545 -13.18 4.97
 16:1 31,284 0.48 29,795 1.76 1,490 -19.66 4.76

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 58,715 0.80 53,683 1.61 5,033 -7.14 8.57
 2012  57,600 -1.90 53,244 -0.82 4,356 -13.44 7.56
 2013 56,220 -2.40 51,876 -2.57 4,344 -0.27 7.73
 2014 54,904 -2.34 51,279 -1.15 3,624 -16.58 6.60
 2015 54,611 -0.53 51,350 0.14  3,261 -10.02 5.97
 13:1 56,952 -1.65 52,315 -2.10 4,637 3.74 8.14
 13:2 56,698 -1.95 52,198 -2.28 4,500 2.09 7.94
 13:3 55,892 -2.30 51,489 -2.39 4,403 -1.25 7.88
 13:4  55,337 -3.69 51,501 -3.50 3,837 -6.15 6.93
 14:1 55,014 -3.40 51,291 -1.96 3,723 -19.71 6.77
 14:2 54,877 -3.21 51,298 -1.72 3,579 -20.47 6.52
 14:3 54,961 -1.67 51,045 -0.86 3,917 -11.05 7.13
 14:4 54,762 -1.04 51,484 -0.03 3,278 -14.57 5.99
 15:1 54,520 -0.90 51,126 -0.32 3,394 -8.84 6.23
 15:2 54,736 -0.26 51,435 0.27 3,301 -7.76 6.03
 15:3  54,506 -0.83 51,174 0.25 3,332 -14.92 6.11
 15:4 54,680 -0.15 51,664 0.35 3,016 -7.99 5.52
 16:1 54,959 0.80 52,341 2.38 2,617 -22.88 4.76

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 50,328 1.23 46,045 2.11 4,284 -7.36 8.51
 2012  49,243 -2.16 45,449 -1.29 3,794 -11.42 7.71
 2013 48,413 -1.69 44,673 -1.71 3,739 -1.46 7.72
 2014 47,242 -2.42 44,104 -1.28 3,138 -16.07 6.64
 2015 46,623 -1.31 43,826 -0.63 2,797 -10.88 6.00
 13:1 48,822 -1.04 44,845 -1.26 3,977 1.48 8.15
 13:2 48,908 -1.19 45,038 -1.37 3,870 0.89 7.91
 13:3 48,464 -1.61 44,686 -1.52 3,777 -2.75 7.79
 13:4 47,456 -2.92 44,125 -2.69 3,332 -5.84 7.02
 14:1 47,472 -2.77 44,230 -1.37 3,241 -18.50 6.83
 14:2 47,495 -2.89 44,382 -1.45 3,112 -19.58 6.55
 14:3 47,353 -2.29 43,994 -1.55 3,359 -11.08 7.09
 14:4 46,648 -1.70 43,807 -0.72 2,841 -14.74 6.09
 15:1 46,490 -2.07 43,576 -1.48 2,915 -10.08 6.27
 15:2 46,842 -1.37 44,015 -0.83 2,827 -9.16 6.04
 15:3 46,563 -1.67 43,710 -0.65 2,852 -15.08 6.13
 15:4 46,595 -0.11 44,002 0.45 2,593 -8.71 5.57
 16:1 47,121 1.36 44,846 2.92 2,275 -21.94 4.83

THE UNITED STATES

Labor market conditions continued to improve in the United States during the first quarter. Based on the CPS household survey, employment rose 1.9 to 149.9 million, while unemployment fell 9.7% to 8.2 million, and the jobless rate declined to 5.2% (compared to 5.8% in 2015 and 6.9% in 2014). Employment levels have been rising for the past twenty-two quarters, and during seventeen of the last eighteen quarters, the rate of job growth has been above the critical one percent threshold which is necessary to accommodate population expansion.

Turning to the CES data, national payroll employment increased by 1.9% to 142.0 million in the first 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 financial services, mining & construction, transportation & utilities, government, other services, wholesale trade, information services, and manufacturing.

 
   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 153,752 -0.09 139,648 0.42 14,104 -4.86 9.17
 2012 154,975 0.80 142,469 2.02 12,506 -11.33 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
 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
 16:1 158,160 1.26 149,945 1.93 8,215 -9.65 5.19
 Note: Data are in thousands.

ANALYSIS

During the first quarter, all of the markets covered in this report enjoyed higher employment, lower unemployment, and reduced jobless rates. This positive picture was supported by both the household CPS data and the payroll CES data.

At the national level, employment has increased for the past five years, and the rate of job creation shows no sign of a slowdown. As noted above, CPS employment has been growing for the past twenty-two quarters, and the CES payroll data tell a similar story. 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 157.3 million Americans at work, but instead there were only 149.9 million jobs in the first quarter. If the missing 8.4 million workers are added into the labor force statistics as being unemployed, then the effective jobless rate is 9.7% rather that the official rate of 5.2%.

On the other hand, it should be recognized that the national economy has been creating jobs at a faster rate. In 2013, the number of missing workers exceeded ten million and the effective unemployment rate stood at 11.4%. Still, to absorb the remaining 8.4 million potential workers into the employed labor force will require several years.

At the regional level, the two employment series have become inconsistent again. The annual revision of the CPS data has wiped out the 1.8% job growth for the metro area that was initially reported in 2015. Instead, this series now shows job declines for the metro area, counties, and cities. The wage-based CES data show continuous metro job growth since 2010, even after the annual revisions. This performance is consistent with the national employment data (from both the CES and CPS sources) and local retail activity.

Based on the regional payroll CES data, the Tri-Cities metro economy continues to do well. First quarter employment in the Consolidated Statistical Area was 1.9% above the same period in 2015. In the Kingsport/Bristol MSA, payroll employment was up by 2.3%, while the Johnson City MSA saw 1.3% growth. (The Tri-Cities Consolidated Statistical Area is composed of the Kingsport/Bristol MSA and the Johnson City MSA.). Based on this continued employment growth in the national economy and in the regional economy, the Tri-Cities business outlook remains good.

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, metro areas, counties, and select 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 terms “establishment survey” or “payroll survey” are preferred by the BLS. The CES provides payroll employment data for the nation, states, and metropolitan areas.

Revised Benchmark Data. This first quarter labor market report is based on revised CES and CPS benchmark data. Each year, the U.S. Bureau of Labor Statistics (BLS) issues revised estimates for the establishment or CES payroll data, and the household CPS data. The CES revisions cover national, state, and metro employment levels for 2014 and 2015. The CPS revisions cover state, county, metro, and city labor force estimates for the years 2011 to 2015. (National CPS data is seldom revised.)

The following table shows CES and CPS employment data for the Tri-Cities Consolidated Statistical Area (CSA) since 2007. The CES revisions cover 2014 and 2015 and the changes are small. The CPS revisions cover 2011 to 2015. There was little change in the 2011, 2012, and 2013 data. The job loss in 2014 has been reduced from -1.73% to -1.08%; while the +1.80% job growth in 2015 has been revised to a -0.40% employment decline. In the table, the original CES and CPS employment data for 2014 and 2015 are shown in italics.

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 1.80 221,426 1.94 
 2012 197,133 0.41  219,319 -0.95 
 2013 197,408 0.14 215,472 -1.75 
 2014 198,092 0.35 213,146 -1.08 
 2015 199,417 0.67 212,301 -0.40 
 2014 198,583 0.60 212,077 -1.73 
 2015 201,608 1.52 215,901 1.80 
 

As we have discussed and shown in previous reports, the CPS estimates for the local labor markets are very unstable. The annual revisions since the Great Recession have usually resulted in drastic changes in the data. The 2015 revision of regional employment growth of +1.8% to a -0.4% decline is only the latest example. In contrast, the CES payroll data have remained remarkably stable, with only small annual changes. For purposes of local decision making, the wage data has become the only reliable statistical source.

Technical Note on the Labor Market Tables. This report was prepared in May 2016, and is based upon the 2015 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 (Ret), and Research Associate (Ret), BBER. Dr. Hipple will continue to prepare the labor market reports on an interim basis. 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.