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***Note from The Tennessee Conservative – this article posted here for informational purposes only.
By Adam Friedman [Tennessee Lookout -CC BY-NC-ND 4.0] –
Tennessee’s unemployment rate remains at 3.6%, but for the fifth month in a row, the number of people employed statewide has dropped, newly released data from the U.S. Bureau of Labor Statistics, BLS, shows.
Around 3.42 million Tennesseans were employed in November 2025, and that number has now fallen to 3.38 million as of April.
A factor in this drop has been that almost 40,000 people have left the labor force entirely over that period, the first contraction in the overall labor force Tennessee has seen outside the coronavirus pandemic in at least a decade.
Don Bruce, the Director of the Boyd Center for Business and Economic Research at the University of Tennessee, said that the state’s employment has been relatively steady for the past year, but the recent “sluggishness” can be attributed to the immigration crackdown reducing the labor force and AI causing a pause in new hiring.
“Things are softening but not collapsing,” Bruce said. “We are still on a longer-term upward trend and have not adjusted our forecasts to reflect otherwise.”
For years, the number of people working in Tennessee has steadily grown as the state’s population boomed in the 2010s.
This influx of new residents has allowed Tennessee’s economy to grow faster than the national average and maintain one of the lowest unemployment rates in the country.
During this era, state officials made significant efforts to recruit companies with large taxpayer incentive packages, such as a recent deal that gave Starbucks $30 million to move 2,000 jobs to a Nashville-based headquarters.
The state’s recruitment efforts have steadily declined over the past few years. In 2025, the state’s FastTrack grant program for business recruitment brought in 3,500 jobs, about half as many as in 2024 and significantly less than the 21,000 jobs recruited in 2021.
Despite solid employment numbers, Tennessee is still in the bottom 10 of states for median household income. The median household income in the state is around $71,000, about $10,000 less than the United States average.
What else is in the BLS data?
Tennessee’s education and health services sector continues to remain its strongest sector, adding almost 70,000 jobs in the last five years. The opposite is true in manufacturing and farm jobs in Tennessee, the BLS data shows.
The state saw its manufacturing industry grow to a peak of employing 365,000 people in 2024. Over the past two years, the number employed has dropped by about 12,000.
Alex Norwood, a research associate with the Boyd Center, said manufacturing jobs could be a response to an economic slowdown, but cautioned that they’re also more vulnerable to tariffs and automation.
As the job market appears to have cooled in Tennessee, inflation is also rising, with the BLS estimating that prices across the South have increased by 3.6% compared to this time last year.
The yearly inflation rate remained below 3% from April 2024 until last month, when it started to tick up.
