Economic Overview T he strong first-quarter job performance faded during the second quarter, with important labor-market indicators showing little change. Slower job growth corresponds with several events in the past few months, including the payroll tax increase that took effect earlier this year, significant cuts to federal government spending, and reduced demand for U.S. goods from our trading partners in China and Europe. Nonfarm employment in Tennessee rose by 4,700 jobs, a lackluster 0.2% gain. Manufacturing lost 1,000 jobs, but the services-providing sectors gained 4,200 (Table 1). Some employers reduced workforces as suggested by a rise in initial claims for unemployment insurance. Initial claims increased 5.1% from the first quarter, rising by a weekly average of 278 but not out of line with the level experi- enced during the past six quarters (Figure 1). Labor force changed little, but unemployment rose 14,000, causing the unemployment rate to rise to 8.3% from 7.8% during the first quarter. Slower growth is also reflected by very slow growth of state sales tax collections, up just 1.4% over the year. Col- lections have grown very slowly over the past 15 months, reflecting slower spending growth. Produced by the Business and Economic Research Center at Middle Tennessee State University and supported by a Tennessee Housing Development Agency grant 1 Table 1. Selected Tennessee employment indicators (thousands, seasonally adjusted) 2012.2 2012.3 2012.4 2013.1 2013.2 Employment by industry (nonfarm) Goods-producing sectors 423 424 426 428 429 Services-providing sectors 2,290 2,292 2,306 2,325 2,329 Total employment 2,859 2,858 2,880 2,886 2,870 Unemployment rate 8.1% 8.1% 7.7% 7.8% 8.3% Source: Bureau of Labor Statistics continued on page 2 berc Business and Economic Research Center • Middle Tennessee State University 1 TENNESSEE HOUSING MARKET 2nd Quarter 2013 Figure 1. Tennessee initial claims for unemployment insurance (quarterly averages of weekly data, seasonally adjusted) 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 Source: U.S. Dept. of Labor, Employment & Training Administration 2008 2009 2010 2011 2012 2013 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 by David A. Penn, Director • Business and Economic Research Center • Middle Tennessee State University
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Economic Overview
The strong first-quarter job performance faded during the
second quarter, with important labor-market indicators
showing little change. Slower job growth corresponds with
several events in the past few months, including the payroll
tax increase that took effect earlier this year, significant
cuts to federal government spending, and reduced demand
for U.S. goods from our trading partners in China and
Europe. Nonfarm employment in Tennessee rose by 4,700
jobs, a lackluster 0.2% gain. Manufacturing lost 1,000 jobs,
but the services-providing sectors gained 4,200 (Table 1).
Some employers reduced workforces as suggested by a rise
in initial claims for unemployment insurance. Initial claims
increased 5.1% from the first quarter, rising by a weekly
average of 278 but not out of line with the level experi-
enced during the past six quarters (Figure 1).
Labor force changed little, but unemployment rose 14,000,
causing the unemployment rate to rise to 8.3% from 7.8%
during the first quarter.
Slower growth is also reflected by very slow growth of
state sales tax collections, up just 1.4% over the year. Col-
lections have grown very slowly over the past 15 months,
reflecting slower spending growth.
Produced by the Business and Economic Research Center
at Middle Tennessee State University and supported by a