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Economist says region’s job level declines

May 21st, 2013 9:48 pm by Madison Mathews

Economist says region’s job level declines

Uncertainty in the national economy and a growing number of people leaving the area for work in other areas where the job market is thriving has led to employment falling again in the region, continuing a trend that started last year, according to the latest labor market report compiled by local economist Dr. Steb Hipple.

“The regional and local economies ... saw job growth in 2010 and 2011, but have been beset by a new cycle of job losses in 2012, just as the national economy began to show signs of revival,” Hipple said in the report released by the East Tennessee State University Bureau of Business and Economic Research.

First quarter data shows the Tri-Cities metropolitan area saw an unemployment rate of 7.5 percent compared to 7.6 percent in the same period of 2012.

Hipple said job growth in the Tri-Cities was led by education and health services, professional and business services, and leisure and hospitality, while both retail trade and transport and utilities had some small growth.

The largest number of job losses were seen in construction, information services, finance and government.

The decline in government jobs was one of the ill effects brought on by the sequester, according to Hipple.

“This was the first effects of the sequester, which started in March, so in second quarter data we will probably see a more significant job loss in that sector,” he said.

On a year-to-year basis, job levels fell in each of the Tri-Cities, with Johnson City leading by 1.9 percent. Kingsport saw a decline of 0.8 percent, while Bristol saw a decline of 0.3 percent.

The unemployment rate from January to March was 7.4 percent in Johnson City, 7.4 percent in Kingsport, and 7.2 percent in Bristol.

Hipple said fewer jobs in the region means “the unemployment level can be reduced by discouraged workers leaving the labor force or leaving the area to look for work elsewhere. With the national economy reviving while the area economy weakens will create a strong pressure on job seekers to try their luck in areas where employment is increasing.”

The report is based on new annual benchmark data compiled by the U.S. Bureau of Labor Statistics.

Hipple said the new benchmark data makes significant changes to the number of job losses in the region during the last few years.

A new employment estimate for 2009 shows a drop of 10,000 jobs compared to the previous estimate of 9,000 job losses in 2009, while job growth in 2010 and 2011 was estimated to be about 6,600 jobs compared to an earlier estimate of 7,500 new jobs.

Even with the change in data, Hipple said the Tri-Cities region entered the recession later than much of the country and saw a boost in job growth before the rest of the nation.

“We still went into the recession in 2009 after the rest of the country fell off the cliff in 2008, so we were late getting in. 2010 and 2011 were years of significant job growth, so we were one of the leading areas of the country in terms of coming out of the recession,” Hipple said. “But what it has shown in the revised data is that the recession was a little bit deeper here than the initial data suggested and the job in 2010 and 2011, while significant, has been trimmed.”

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