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The Atlanta Fed's SouthPoint offers commentary and observations on various aspects of the region's economy.

The blog's authors include staff from the Atlanta Fed's Regional Economic Information Network and Public Affairs Department.

Postings are weekly.


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08/04/2015


Auto Manufacturing an Economic Boon for Tennessee

Making cars has been giving an economic boost to the Volunteer State since the early 1980s, when Nissan built the state's first large-scale auto manufacturing plant in Smyrna. General Motors followed by establishing a plant in Spring Hill in 1990. The latest automaker to set up camp in Tennessee is Volkswagen, which opened its plant in Chattanooga in 2011. About a year ago, Volkswagen announced plans for an expansion at its Chattanooga facility. The Center for Business and Economic Research (CBER) at the University of Tennessee recently released a report detailing the economic impact of the Volkswagen expansion, which, needless to say, should be significant.

2012_volkswagen_chattanooga
Image copyright Volkswagen of America Inc.

The purpose of the Volkswagen plant expansion is to manufacture a new midsize SUV for the U.S. market. State and local governments offered incentives of nearly $300 million to entice Volkswagen to build its new SUV in Chattanooga and, according to the CBER report, the state should receive a high return on its investment. The expansion will add more than 500,000 square feet to the facility and an additional 1,800 employees. Tied to the expansion, Volkswagen plans to establish the North American Engineering and Planning Center in Chattanooga, which will create 200 jobs. The plant expansion and the R&D center together will create 2,000 new jobs, which will nearly double Volkswagen's current Chattanooga workforce of 2,358. These numbers are impressive, but they only scratch the surface of the estimated overall impact.

Chattanooga_map

The CBER report breaks down the overall impact of the plant expansion into two phases: the construction phase and the operations phase. The CBER projects the construction phase alone to be quite lucrative for residents of the state. It estimates that the construction and development stage will create 5,391 full-time jobs for a year. The report also anticipates the generation of $217 million in new income during that year for Tennesseans. State and local municipalities stand to gain a one-time increase in tax revenues equal to $20.5 million. During the operations phase (after the plant is fully operational), the plant is expected to create 9,799 new full-time permanent jobs in the state. These jobs would not only include new Volkswagen employees but also the jobs created at the numerous Volkswagen suppliers located in Tennessee.

New income for Tennesseans will be in the neighborhood of $372.6 million, according to CBER estimates. The income generated during the construction phase may be direct or indirect income. (An example of indirect income would be the hiring of construction workers who are employed by Tennessee construction firms, which then spend their earnings on goods such as food or clothing in the state.) The report estimates that every dollar spent on construction of the plant will result in 47 cents of income for Tennessee. (An example of direct income would be the salaries Volkswagen pays its new employees, and estimates indicate that Volkswagen will pay $100.9 million in salaries to its new employees.) In addition, Volkswagen plans to purchase many inputs directly from Tennessee suppliers, so every dollar spent during the operations phase is estimated to lead to $3.69 of income for Tennesseans.

There are also intangible benefits to consider, such as an increase in charitable giving as incomes rise. The multiplying effects of the plant expansion will touch many aspects of not only Tennessee's economy but also the entire regional economy. It will be interesting to watch as auto manufacturing continues to put down roots in the Southeast. Hopefully, the economic benefits are just beginning to rev their engines.

By Troy Balthrop, a senior Regional Economic Information Network analyst in the Atlanta Fed's Nashville Branch

August 4, 2015 in Manufacturing, Tennessee | Permalink

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05/14/2015


Middle Tennessee Consumer Confidence on the Rise

Last week, the Federal Reserve Bank of Atlanta's research director Dave Altig wrote a macroblog post that emphasized the importance of consumer spending as the economy tries to rebound from a disappointing first quarter. Incoming data indicate that consumers haven't been willing to open up their wallets as much as expected considering recent economic conditions. The underlying fundamentals that influence consumer spending would suggest a higher level of consumption than the economy is currently experiencing. In a recent speech, Atlanta Fed President Dennis Lockhart pointed out these fundamentals, which included real personal income growth, household wealth, access to credit, and consumer confidence. According to the Middle Tennessee Consumer Outlook Index, released on May 1, Middle Tennessee has the confidence fundamental covered.

The Middle Tennessee Consumer Confidence survey is conducted by the Office of Consumer Research at Middle Tennessee State University, headed by Professor Timothy Graeff. Students in Graeff's marketing research course conduct the survey by phone. The 11-question survey asks questions related to economic conditions in the United States as well as Middle Tennessee.

The overall index rose to its highest level since June of 2004 (see the chart).

Chart-1

Participants felt particularly more optimistic about the local economy than the national economy. A solid 65 percent of survey participants indicated that business conditions in Middle Tennessee were good, but only 27 percent felt that conditions were good for the nation.

Looking forward, the future expectations index also rose since the last survey, suggesting that people are more optimistic about the economy over the near term. When asked what conditions for Middle Tennessee would be like in six months, 44 percent indicated things would be better, and 50 percent felt things would be about the same. The national numbers were less optimistic than the local but still represented an improvement over the last survey, with 26 percent indicating conditions would improve and 57 percent stating conditions would stay about the same.

The national consumer confidence indexes have trended up overall since the depths of the recession but still have not reached levels seen in the mid-2000s (see the chart).

Consumer-confidence

Still, as Dave Altig pointed out in his macroblog post and President Lockhart in his speech, the fundamentals suggest that consumer spending will pick up in the not-too-distant future. Our confidence may be slightly guarded, but we are optimistic. Just like Middle Tennessee.

By Troy Balthrop, a senior Regional Economic Information Network analyst in the Atlanta Fed's Nashville Branch

May 14, 2015 in Consumer Savings, Economy, Tennessee | Permalink

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11/20/2014


Music City Is Playing Your Song

Nashville has long been synonymous with country music, and the local economy is closely tied to the music industry. It's not unusual to see a country music star dining in a restaurant or showing up at a local music club for a jam session. In short, music looms large over many aspects of life and culture here. But you might ask, what exactly is the music industry's economic impact on Nashville? Good question! Let's explore.

Music touches several sectors of the Nashville economy. Banking, construction, and hospitality all benefit from the music industry. The Nashville Chamber of Commerce put together a thorough study on the music industry's economic impact. The study revealed that Nashville stands toe to toe with—and in many ways surpasses—New York and Los Angeles for having a fully self-reliant music industry, which in layman's terms means you can write, record, produce, promote, finance, and distribute music without ever leaving the city. Of course, music starts with musicians, singers, and songwriters, but today's music business requires specialized talents that go beyond the stage. Creative, technical, and managerial skills are abundant in the Nashville metropolitan statistical area (MSA). The chamber's study found that relative to Nashville's size, the amount of talent in the music industry at all levels of the process is extraordinary.

The local music industry employs a vast array of people across a correspondingly vast array of sectors. In 2012, according to the chamber's study, the Nashville MSA employed almost 3,000 artists and musicians with an average annual pay of more than $85,000. Music publishing employed almost 1,500 people, with an average annual pay of nearly $75,000. The list goes on and on, including musical instrument manufacturing, musical supply stores, record stores, record production, radio networks, and recording studios. It's almost impossible to tell where the employment influence of the music industry begins and ends. Many jobs are directly related to music, but others are indirectly related and not classified in a way that shows up in a study of employment in the music industry. All in all, the chamber's study indicated that the density of activity in Nashville's music industry is some 10 times greater than New York or Los Angeles, and even greater than cities such as Atlanta, Austin, and New Orleans. Core music industry employment per 1,000 people exceeds all other U.S. cities by a large margin.

The chamber of commerce's report also found that some 56,500 people's employment was tied to the music industry, resulting in labor income of over $3.2 billion and contributing almost $5.5 billion to the local economy, with a total output of almost $10 billion, a large portion of the Nashville MSA's $85 billion gross domestic product.

But what about other areas of the economy that benefit from the music industry's contributions? According to a July 2013 article from the Atlantic CityLab, industries such health care, transportation, and food service benefit greatly. The article pointed out that work in Nashville's full-service restaurants has grown 10 percent since 2009, and the entertainment industry can be credited for a good bit of that growth. The article also pointed out the multiplier effect the music industry has on local employment. For every 10 jobs created in the music industry, another 52 positions are created in the broader economy.

Needless to say, the music industry is important to the Nashville region. Whether it's the entertainment talent, the history, or the culture, music thrives here. So put on your cowboy boots, your cowboy hat, and blue jeans. Nothing says "Welcome to Nashville" more. We are not called Music City USA for nothing!

By Troy Balthrop, a Regional Economic Information Network analyst in the Atlanta Fed's Nashville Branch

November 20, 2014 in Employment, Entertainment, Jobs, Nashville, Tennessee | Permalink

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07/09/2014


Southeastern States Mind the (Skills) Gap

During the past few years, we have heard from a significant number of regional business contacts about the challenges they experience filling certain positions and concerns about a skills gap facing the Southeast. We heard this from various industries, most often about engineering, construction, and IT jobs. The most recent Southeastern Insights mentions this widespread issue.

This skills shortage situation is not unique to the Southeast. The U.S. Chamber of Commerce Foundation published a state-by-state analysis last month measuring performance in a number of areas that contribute to economic prosperity. Their key conclusion reiterates our contacts’ concerns: that mounting skilled-labor shortages are on the horizon to such an extent that they may soon hinder economic growth. According to the study, the current skills gap dilemma is expected to grow substantially as baby boomers retire.  

Fortunately, there’s a bright side: many states have recognized this situation and have taken steps to address the ostensibly approaching workforce crisis. Many of our contacts from both private and public sectors pointed to joint initiatives created by states and businesses designed to confront and abate the situation; which the U.S. Chamber of Commerce Foundation study says is essential to closing the gaps. Below is a sample, extracted from the study, of some of the efforts Sixth District states have taken:

Alabama

  • In 2013, the state launched a College and Career Ready Task Force charged with identifying ways to better prepare students for the workforce by training them in the skills demanded by growing industries across the state.
  • New and expanding businesses can get workforce development services through the Alabama Industrial Development Training program, which offers services to businesses in need of skilled workers, including preemployment selection and training, leadership development courses, and third-party process improvement assessments.
  • The Alabama Technology Network provides skills training for the manufacturing and high technology workforce. The network connects businesses to the portfolio of training resources and programs provided by the state’s colleges and universities, offering services through regional centers.
  • The Go Build Alabama initiative works to attract talented workers to construction and skilled trades.

Florida

  • Quick Response Training enables new and expanding businesses in need of training to partner with community colleges and other educational institutions in the state to develop and deliver workforce training programs.
  • The Incumbent Worker Training program supports training the existing workforce to enhance and maintain competitiveness.
  • The Career and Professional Education Act guides Florida’s efforts to diversify its economy and develop a more skilled workforce by encouraging collaboration among education, industry, workforce, and economic development stakeholders from across the state.

Georgia

  • In early 2014, the state approved a $44.7 million Science Learning Center on the University of Georgia’s South Campus, providing state-of-the-art facilities aimed at expanding the pipeline for students in science, technology, engineering, and math (often referred to collectively as STEM).
  • Groundbreaking also took place for the Georgia BioScience Training Center, which will support training for companies that choose to locate within the state. Georgia Quick Start, the state’s job training program, will build and operate the state-of-the-art biotech training center.

Louisiana

  • Via the Small Business Employee Training Program, employers can receive up to $3,000 to defray the costs of off-the-shelf training programs for an existing employee.
  • The Louisiana Workforce Commission established Workforce Partners to recognize businesses that have committed to building a “job ready” workforce in the state through support and training.
  • The Strategies to Empower People program provides access to job training, job readiness support, vocational education programs, and a variety of other skills-development services for those receiving government assistance.

Mississippi

  • The Workforce Investment Network consists of more than 60 training and employment centers around the state where employers and job seekers can access services like training, job postings, on-the-job training programs, employment screening services, and job placement assistance.
  • The Mississippi Development Authority also maintains a team of workforce specialists who work with colleges, businesses, workforce development professionals, and other stakeholders to identify resources useful to a particular business. The authority also builds partnerships to pursue needed training services.
  • The University of Mississippi maintains a Professional and Workforce Development program, offering online enrichment courses, certification programs, and outreach services, bringing tailored training programs directly to the employer.

Tennessee

  • The Tennessee Job Skills grant program offers support to technology companies that create “high-skill, high-wage” jobs, reimbursing eligible costs incurred in training development implementation.
  • Entrepreneurs in need of quick turnaround in receiving support for training costs can make use of the state’s Job Based Training Reimbursement program, which provides support within the first 90 days after a new job is created and training starts.
  • The FastTrack Job Training Assistance Program offers employers state support to cover costs for classroom instruction, on-the-job training, training-related travel, training vendors, and development of training materials and programming.

Sixth District states appear to be on a solid track to address skills gap challenges, combining investment in training, education, and business assistance as a long-term workforce development strategy. Time will tell if the investment pays off (we should know sooner rather than later, as boomers are expected to start retiring in droves).

To learn more about states’ efforts, as well as their rankings across five policy areas—talent pipeline, exports and international trade, technology and entrepreneurship, business climate, and infrastructure—check out the U.S. Chamber of Commerce Foundation’s study. There’s also a nifty interactive map you can use to view state rankings and data easily.

Photo of Rebekah DurhamBy Rebekah Durham, economic policy analysis specialist in the Atlanta Fed's New Orleans Branch


July 9, 2014 in Alabama, Education, Florida, Georgia, Jobs, Labor Markets, Louisiana, Mississippi, Southeast, Tennessee | Permalink

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04/25/2014


Regional Payroll Growth Rebounds in March

According to last week's regional and state employment report from the U.S. Bureau of Labor Statistics (BLS), Sixth District states added 41,500 payrolls on net in March, and the unemployment rate rose slightly from 6.4 percent to 6.5 percent. This month's release also came with an upward revision to February data that indicated the District added 40,500 jobs that month, about 6,100 payrolls higher than the original February estimate. The table gives a state-by-state breakdown of payroll revisions:

140425_tbl1

The new March data and revised February data appear to be another step in the right direction and perhaps give a somewhat stronger signal that the region's labor markets are gaining some traction after experiencing a few months of slower job growth earlier in the year, a pattern not uncommon over the last few years. Not surprisingly, we've seen a similar pattern in the national data as well (see the chart).


Payroll survey
Once again, Florida was the primary driver of Sixth District payroll growth in March, adding 22,900 payrolls, with Georgia seeing a nice rebound (up 14,600) from February's negative payroll growth (when it was down 5,800). The only state to lose jobs from February to March was Mississippi, which shed 1,400 payrolls. This was the fourth straight month of net payroll losses in that state.

Florida's net payroll gain was the largest one-month addition of any state in the nation, according to the BLS report, and was driven by the leisure and hospitality sector (up 9,500), health care (up 3,300), construction (up 1,900) and manufacturing (up 1,500), and Georgia's net payroll gain—the third-largest of any U.S. state—was driven by retail (up 3,800), the professional and business services sector (up 3,300), and health care (up 3,200).

As for other District states, Tennessee experienced a modest gain in payrolls in March, adding 4,200 jobs. With the largest revision of any Sixth District state, Tennessee's February net payrolls were revised up 3,400 payrolls for a total of 10,300 payrolls. Tennessee's payroll growth over the two-month period of February and March was primarily concentrated in professional and business services (up 6,800 payrolls). Louisiana and Alabama respectively added 900 and 300 jobs in March (see the chart).


Household survey
The aggregate unemployment rate for the Sixth District rose from 6.4 percent to 6.5 percent in March. Half of the six District states experienced an increase in their unemployment rates (Alabama, Florida, and Mississippi), and Louisiana's rate remained unchanged, Georgia's fell from 7.1 percent to 7.0 percent, and Tennessee's fell from 6.9 percent to 6.7 percent (see the table).

140425_tbl2

Want to find out how many jobs it would take to lower the unemployment rate in any of the 50 states? Check out the Atlanta Fed's State Jobs Calculator.

The BLS's next regional and state employment report, which will reflect April data, will be released May 16.

Photo of Teri GaffordBy Teri Gafford, a Regional Economic Information Network director in the Atlanta Fed's Birmingham Branch

 

and

Photo of Mark CarterMark Carter, a senior economic analyst in the Atlanta Fed's research department


April 25, 2014 in Alabama, Employment, Florida, Georgia, Jobs, Labor Markets, Louisiana, Mississippi, Southeast, Tennessee, Unemployment | Permalink

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03/03/2014


Tennessee’s Auto Industry: Pitfalls and Potholes

The automotive industry in Tennessee is one of the big drivers of the state’s economy. Nissan established its first U.S. manufacturing facility in Smyrna in the early 1980s, and auto-related investments have grown in the state ever since. General Motors opened a plant in Spring Hill in 1990, and Volkswagen opened its Chattanooga plant in 2011. These three facilities collectively employ more than 12,000 workers, a total that doesn’t include the vast amount of automotive suppliers that call Tennessee home. Currently, Tennessee is the largest employer of auto-industry workers in the South.

Coming out of the Great Recession, Tennessee is now well positioned to continue its standing as a competitive destination for the automotive industry. In October 2013, the Brookings Institute produced a report titled “Drive! Moving Tennessee’s Automotive Sector Up the Value Chain.” The report pointed out the Volunteer State’s various advantages in the auto industry, which included its geographic location, strong transportation infrastructure, and favorable cost structure.

The report also shared some interesting employment numbers. For example, Tennessee’s share of auto-manufacturing employment in North America increased to an all-time high of 3.3 percent by the end of 2012. Also, more than 12 percent of all jobs created in Tennessee since the recession are related to the auto industry. Needless to say, carmaking is important to the state’s economic health.

The Brookings report also pointed out some competitive challenges and pitfalls the state will need to navigate in the coming years:

  • Cost pressures: Input costs continue to rise, as does the consumer’s demand for greater value. Production increases in low-wage countries will continue to add pressure, even though the labor-cost gap between U.S. locations and low-cost countries is closing.
  • Demographics and workforce: Technology advances have made the automotive-manufacturing workplace much more sophisticated. The challenges to find an adequately trained workforce will be a constant challenge.
  • Technology: The entire automobile production system and product line will require constant technological upgrades to keep pace with changing regulatory requirements. For innovations to be effective, they will need to reach far into the automaking supply chain.

The Brookings report also suggested that the state lacks a strategic approach to maintaining a business-friendly environment for advanced industries. For example, Tennessee ranks in the bottom fifth of states in terms of tax competitiveness for new research-and-development firms and labor-intensive manufacturing.

The report also indicated that holes exist in Tennessee’s workforce-development programs. The state falls short in literacy, numeracy, and educational attainment, gaps that complicate the state’s ability to ensure the availability of an educated workforce for the auto industry. Also pointed out in the report was the state’s lack of research and development activity in the auto sector. The state also lacks a fertile technology network that caters to auto-sector suppliers, particularly the smaller ones.

Despite all these factors, the future for Tennessee’s auto industry looks bright. The state has momentum and the necessary resources to adapt to future challenges. Tennessee has the continent’s broadest automaking supply chain, a huge advantage in today’s auto-manufacturing environment. Past success does not guarantee future performance, but hopefully Tennessee can avoid the potholes on the road ahead.

By Troy Balthrop, a Regional Economic Information Network analyst in the Atlanta Fed’s Nashville Branch


March 3, 2014 in Automobiles, Employment, Jobs, Manufacturing, Tennessee, Transportation | Permalink

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12/31/2013


Georgia, Tennessee Lead Regional Payroll Growth in November

In November, 45 states had unemployment rate decreases, and the other five had no change, according to the monthly regional and state employment and unemployment summary from the U.S. Bureau of Labor Statistics (BLS). All the states in the Atlanta Fed’s district were among those 45 states that saw declines in their unemployment rates, with the unemployment rates in both Georgia and Tennessee falling 0.4 percentage points (to 7.7 percent and 8.1 percent, respectively). The Sixth District aggregate unemployment rate fell 0.3 percentage points to reach 7.0 percent, mirroring the trend and level of the national unemployment rate in November.

Georgia and Tennessee saw the largest growth in payrolls in the Sixth District in November as well, according to the same report. Georgia added 14,500 payrolls in November (see the table), with roughly a third of those new payrolls being in the construction industry (up 4,400 payrolls). Roughly another third of Georgia’s job gains were in transportation and warehousing industries (up 4,100 payrolls), and the other third of Georgia’s payroll growth in November was split between leisure and hospitality (up 2,900 payrolls) and financial activities (up 1,700 payrolls). Employment growth in real estate was notable last month (up 1,200 payrolls). Tennessee added 9,400 payrolls in November, with about 2,500 of those payrolls in the leisure and hospitality sector and another 1,900 in durable goods–manufacturing industries.

Payroll Change Data

Three Sixth District states have unemployment rates higher than the national level of unemployment (Georgia, Tennessee, and Mississippi), and three sit below (Alabama, Florida, and Louisiana; see the chart).

Unemployment Rates for Sixth District States, and Sixth District Aggregate

The BLS will release metropolitan area employment and unemployment data for November, which will provide an even more granular view of regional labor markets, on Tuesday, January 7, 2014, at 10 a.m.

Photo of Mark CarterBy Mark Carter, a senior economic analyst in the Atlanta Fed’s research department


December 31, 2013 in Employment, Georgia, Labor Markets, Southeast, Tennessee, Unemployment | Permalink

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An accurate and labor perspective on the economic growth and stability of the south of the U.S. Excellent document.

Posted by: Jean Pier Dorta | 01/02/2014 at 10:37 PM

12/18/2013


Middle Tennessee Consumer Confidence: Down but Not Out

Earlier this week, my colleague Christine Viets wrote about how consumers appear to be spending very cautiously this holiday season. One indication of why spenders have been wary can be seen in this month’s Middle Tennessee Consumer Outlook Index. After posting gains throughout 2013, the index dropped in December. The decline suggests that consumers in Middle Tennessee have a less optimistic view of the economy than they did in September.

The Middle Tennessee Consumer Confidence survey is conducted by the Office of Consumer Research at Middle Tennessee State University, headed by Professor Timothy Graeff. Students in Professor Graeff’s marketing research course conduct the survey by phone. The survey asks 11 questions related to economic conditions in the United States as well as Middle Tennessee.

Participants felt better about the local economy than they did about the national economy. The survey indicated that consumers in Middle Tennessee are rather pessimistic about current business conditions in the United States. Only 12 percent of respondents believe national business conditions are good, while 26 percent believe conditions are bad. Opinions about Tennessee business conditions were better, with 42 percent indicating conditions are good versus 9 percent who believe conditions are bad.

Looking forward, responses were slightly better for the U.S. economy. When asked what conditions for the United States would be like in six months, 25 percent indicated things would be better, and 25 percent felt things would be worse. For Tennessee, 27 percent expressed conditions would improve, while 11 percent stated conditions would be worse.

Historically, Middle Tennessee consumers have been more optimistic about the future of the economy than national consumers. When comparing the November Conference Board Consumer Confidence Index and the Middle Tennessee survey, Middle Tennessee consumers remain more optimistic about the future of the economy, the job market, and their personal situation.

Importantly, even though the Middle Tennessee consumer outlook declined, it is still more positive than negative, suggesting that people will still be visiting malls and outlet stores in the area and that consumers in Middle Tennessee may buck the national trend.

By Troy Balthrop, a Regional Economic Information Network analyst in the Atlanta Fed’s Nashville Branch


December 18, 2013 in Economic Indicators, Outlook, Tennessee | Permalink

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10/08/2013


Middle Tennessee’s Economy: What a Difference a Year Makes

At the end of September, Middle Tennessee State University’s Business and Economic Research Center hosted the school’s annual economic outlook conference. In October of 2012, we reported on the presentation by the center’s director, Dr. David Penn, who spoke at last year’s conference about his forecast for Middle Tennessee’s economy. In 2012, his forecast was not particularly upbeat, although he did highlight a few positive signs emerging in the region, particularly in manufacturing and housing. Fast-forward a year, and the economic picture is much brighter, according to Dr. Penn’s presentation at this year’s conference.

The two positive signs, manufacturing and housing, have turned into powerful trends that are driving Middle Tennessee’s economy, especially in Nashville. The manufacturing sector is performing exceptionally well, propelled by the expansion in auto manufacturing. The Nashville-area manufacturing sector has seen 11,000 new jobs the since 2010. While employment gains in the sector have slowed in 2013, recent job announcements from a number of manufacturers, including Nissan and GM, suggest acceleration in the near term.

The housing sector has also shown a lot of strength over the past year. Home sales are booming, with home inventory relative to sales now at the lowest level since 2006. Single-family home construction is rapidly increasing. Dr. Penn estimates that home price growth could accelerate and may even approach prerecession levels next year.

The Nashville area’s quickening economic tempo has fueled job creation. In terms of the pace of job growth, two counties in the Nashville metropolitan statistical area (MSA), Rutherford and Williamson, are in the top 15 counties among more than 300 largest U.S. counties. Total employment in the Nashville MSA was growing faster than in any other major metro area (with payroll employment of at least 500,000) in the second quarter on a year-over-year basis. There are now nearly 50,000 more jobs than in 2007. Employment growth is also broad based across industries led by job gains in professional and business services and manufacturing. In fact, in the second quarter the year-over-year pace of job growth in those two industries in Nashville ranked first and second, respectively, among the country’s largest MSAs.

Measured by the unemployment rate, however, Nashville’s labor market does not look as rosy—the unemployment rate has moved higher in recent months. But the news is not all bad since the increase in the unemployment rate is mostly a result of people entering the labor force at a faster rate than the pace of job creation. Perhaps because of improved job prospects, the labor force participation rate in Nashville has been increasing for more than two years after a sharp drop-off in 2010.

What about Nashville’s economy a year from now? Dr. Penn projects ongoing strength in housing, continued improvement in manufacturing, and a declining unemployment rate as a result of strong job growth.

photo of Galina AlexeenkoBy Galina Alexeenko, a Regional Economic Information Network director in the Atlanta Fed’s Nashville Branch


October 8, 2013 in Economic Growth and Development, Economic Indicators, Employment, Housing, Manufacturing, Nashville, Tennessee | Permalink

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08/15/2013


Cleveland Rocks!

Readers of SouthPoint will recall my affinity for Cleveland’s professional sports teams. It’s been a long time since we have won anything (1964, to be exact; the year BEFORE I was born, by the way). But I’ll proclaim the drought partially over with Jason Dufner’s recent win at the PGA Championship. “Duf” is a Cleveland native, so I think that should count. He’s also lived in the Southeast and went to college here, so it’s a win for the Sixth Federal Reserve District as well.

Since I’m not a sportswriter, I’ll cut right to the point of the Cleveland link. It’s not really a link between Cleveland, Ohio, and sports victories. It’s a link between Cleveland, Tennessee, and economic victories.

According to data from the U.S. Bureau of Labor Statistics, the Cleveland, Tennessee metro area has experienced the largest increase in total employment (on a percent change basis) since the onset of the national recession in late 2007, at 7.8 percent. It appears that Cleveland is benefiting from its proximity to the Volkswagen auto manufacturing plant in Chattanooga and the rebound in national housing, which has increased demand for household durables—something that is benefiting the Whirlpool appliance manufacturing plant in Cleveland, as an Atlanta Fed publication recently noted.

Hinesville-Fort Stewart, Georgia, is next on the list with a 7.7 percent gain since December 2007. Much of that gain is no doubt tied to military base adjustments, as are the gains logged by Clarksville, Tennessee, and Warner Robins, Georgia. Nashville’s 6 percent increase is perhaps the most impressive and has the most impact, as it represents a net increase of 46,300 jobs. Knoxville is the other Tennessee metro area whose current employment levels are ahead of December 2007 readings.

In Louisiana, employment levels in the cities of Lafayette, New Orleans, and Baton Rouge are currently above prerecession levels. Alabama has two metro areas in positive territory: Auburn-Opelika and Tuscaloosa. Currently, Auburn is ahead of Tuscaloosa in terms of employment gains, and I will diplomatically refrain from making any analogies to college football...

The following table lists the region’s metro areas and shows the net change in total employment from December 2007 to June 2013 in terms of both total and percent change. What stands out is the fact that just 11 of the 65 metro areas in the region are at employment levels that are higher than they were in December 2007. It’s sobering to think that employment levels, although improving, are still so far below prerecession levels in most the of region.



That said, it is just as important to acknowledge that the region’s labor markets are improving. The chart below shows the level of total employment and the unemployment rate for the six states that are wholly or partially in the Atlanta Federal Reserve’s District (Alabama, Florida, Georgia, Louisiana, Mississippi, and Tennessee).



As Atlanta Fed President Dennis Lockhart noted in his August 13 speech to the Atlanta Kiwanis,

We have continued to see steady progress in economic fundamentals, in my opinion. Progress is evident, and we should not lose sight of that.

Photo of Mike ChrisztBy Mike Chriszt, a vice president in the Atlanta Fed’s public affairs department


August 15, 2013 in Employment, Growth, Nashville, Southeast, Tennessee, Unemployment | Permalink

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