Second quarter employment gains in the region were “impressive” and “strong,” restoring most of the jobs lost in the 2008-09 recession, according to a Tri-Cities labor market report authored by local economist Steb Hipple.
The Tri-Cities metro area saw employment increase by 2.9 percent to 232,417, a gain of more than 6,500 jobs compared to the second quarter of 2010, Hipple’s report showed; the last time employment was near this level was the fourth quarter of 2008.
Yet the East Tennessee State University professor cautioned against too much optimism despite the seemingly good news.
“Ordinarily, large employment gains in the region coming out of a recession would be a cause for celebration,” he said. “However, national business conditions will ultimately determine what happens here, and recent events have raised fears of either no growth or even a possible business downturn in the U.S. economy.”
Still, the spring months were good to each of the Tri-Cities, with all seeing strong employment growth. On a year-to-year basis, job levels increased 3.6 percent in Kingsport, 3.1 percent in Bristol, and 2.5 percent in Johnson City, Hipple’s report said. Unemployment declined 6.4 percent in Bristol and 2.3 percent in Kingsport.
Both the Tri-Cities metro area and Johnson City experienced higher unemployment in the second quarter, by 0.4 percent and 4.2 percent respectively, increases that Hipple explained were caused by the high level of job creation luring many discouraged workers back into the labor force.
The unemployment rate decreased over the April to June period for the Tri-Cities area, falling to 8.6 percent compared to 8.8 percent a year ago, the report said. This marks the fourth quarter in a row of labor market recovery in Northeast Tennessee and Southwest Virginia.
While regionally the economy seems to be doing well, the business cycle recovery in the national labor market “seemed to falter,” Hipple said.
“The second quarter data show very different patterns in the regional and national labor market conditions,” he said. “The national picture is very different, with job levels still several millions below the 2007 employment high point. And while production and employment are still rising in the United States, the recent gains have been trivial.”
National employment did grow for the third quarter in a row, by 0.3 percent, but that was well below the rate of the previous two periods. Unemployment decreased, but again below the rate of 2011’s first quarter.
According to Hipple, the U.S. remains stuck in the pit of the 2008-2009 recession, though it officially ended in June 2009.
“The following two-year ‘recovery’ period has been very feeble,” the report said. “Employment and production today are still well below the pre-recession levels of 2006 and 2007. ... Any business slowdown or new recession will begin at these depressed levels of production and employment. Is that where we are going? Many of the recent national business indicators as well as the political deadlock in Washington are not encouraging.”