UT economy update finds recovery, slow job growth
Posted: Saturday, June 5, 2010 7:59 am
KNOXVILLE (AP) — Tennessee’s economy is slowly recovering from the Great Recession but employment probably won’t be back at pre-recession levels until 2013 or later, according to a University of Tennessee study.
The report by the UT Center for Business and Economic Research is a spring update to the annual Report to the Governor, which the administration uses in budgeting.
Economist Matt Murray directed the study and said the recession in the state hit rock bottom in mid-2009. He said Tennessee is “finally on a sustainable path to recovery.”
However, Murray cautioned the state’s economy isn’t likely to fully recover until 2012 or 2013 and employment might not completely rebound until even later.
“The employment situation across the state has been nothing less than grim,” Murray wrote. “It will take a considerable period of time to erase the job losses that mounted over the course of the recession. Even in 2012, employment levels will lag the figures that prevailed in 2007.”
The report said employment, other than agricultural jobs, slipped 0.8 percent in 2008 and then fell 5.6 percent the next year. Between the first quarter of 2007 and the first quarter of 2010, the state manufacturing sector shed 88,000 jobs. Manufacturing jobs dropped 14.2 percent in 2009 alone.
The study predicts better hiring days won’t start until next year and nonfarm employment is likely to fall slightly in 2010 before growing 1.8 percent in 2011. Manufacturing is expected to continue to slide by 2.5 percent in 2010 before gaining traction in 2011 with an expected 3 percent job growth.
Retail, professional and business services, education and health services, leisure and hospitality and government are all expected to see job growth in 2010.
Economists say the Tennessee unemployment rate likely won’t drop below 10 percent until 2011 and even then some workers who lost jobs in the recession will find it hard to market their skills.
Also, people who have become discouraged and quit looking for work will resume their search as the economy inches upward.
There is a morsel of good news in the study — personal income.
Researchers say people who have jobs can expect to see their income grow by 2.8 percent in 2010 and 4 percent in 2011.
Published in The Messenger 6.4.10