Third quarter employment gains in the region signaled good things for the region as the unemployment rate fell to 7.5 percent in the Tri-Cities metro area, marking 10 straight quarters of job growth in the area, according to the latest labor market report compiled by local economist Dr. Steb Hipple.
“The labor market news — national, regional and local — continues to be good. The national labor market is creating jobs at the best pace in five years and making the first serious dent in recession-linked unemployment,” Hipple said in the report released Monday by the East Tennessee State University Bureau of Business and economic Research. “Job levels in the metro area are back to pre-recession numbers, and regional job growth has slowed accordingly.
The Tri-Cities metro area saw employment increase by 0.5 percent to 232,728, while unemployment fell 10.8 percent to 18,722.
The third quarter saw an increase in employment in each of the Tri-Cities, the report said. On a year-to-year basis, job levels increased 0.8 percent in Bristol, 0.7 percent in Kingsport, and 0.2 percent in Johnson City.
Unemployment declined in all three cities, with 7.5 percent in Bristol, 7.3 percent in Johnson City, and 7.2 percent in Kingsport.
From July to September, the unemployment rate for the Tri-Cities area also dropped, falling to 7.5 percent compared to 8.3 percent a year ago, the report said.
National employment also grew, particularly during the summer months, continuing the “favorable” trend of the first two quarters of this year, Hipple said.
On a year-to-year basis, employment in the country grew 1.8 percent to 143 million jobs, marking the eighth straight quarter of national job growth.
“So far, 2012 has produced the highest level of job creation during the economic recovery beginning in mid-2009, and the best labor market performance since 2007 at the peak of the last business expansion,” Hipple said in the report.
The national unemployment rate over the July to September period was 8.1 percent, falling from 9.1 percent last year and 9.5 percent in 2010.
Hipple said the United States and the Tri-Cities region are at two different points in recovery from the recession, mainly in the area of job creation.
From the second quarter of 2010 to the fourth quarter of 2011, “regional employment returned to pre-recession levels, while the national economy showed minimal job growth. But now in 2012, the employment recovery has finally begun in the U.S. labor market,” according to Hipple’s report.
In order to keep up with population growth, Hipple said employment needs to expand by 130,000 positions each month.
“The national economy is creating jobs well above the rate of population growth, but only about half the rate necessary to get back to full employment by mid-2015,” Hipple said in the report. “So we continue to have the ‘half full’ and ‘half empty’ descriptions of current business conditions.”
With the election behind us, Hipple said the outlook remains uncertain, with most analysts forecasting slow growth in production and employment.
“The great unknown is now the ‘fiscal cliff’ of January 2013 when federal taxes are scheduled to increase and federal spending is scheduled to be cut. If the fiscal cliff actually occurs, we risk an economic contraction in 2013,” Hipple said.