The Volunteer State has logged six straight years of year-over-year economic growth and coupled with historically low unemployment rates, its economy won’t slow down anytime soon, according to a report released by the Secretary of State’s office.
“Every quarter these reports confirm that Tennessee’s leaders have created a wonderful climate where businesses can thrive. Hopefully, this marked success attracts more businesses to call the Volunteer State home,” said Tennessee Secretary of State Tre Hargett.
University of Tennessee economist Dr. William Fox noted Tennessee continues to be one of the better-performing states in the country.
There were 9,326 new entity filings in the third quarter of 2017, representing a 4.8 percent increase compared to the same time last year. Initial filings have had positive year-over-year growth for 24 consecutive quarters. Domestic limited liability corporations (LLCs), which are up 12.4 percent this quarter, account for more than half of all new entity filings.
There were 25,242 dissolutions filed during the third quarter of 2017, representing a 7.5 percent increase compared to the same time last year. This is a common seasonal pattern as many entities are administratively dissolved in August for failing to file annual reports, according to the Secretary of State’s office.
Among the state’s four largest counties, Shelby County experienced the largest year-over-year growth at 17.2 percent with 1,868 initial filings for the third quarter. Davidson County had 2,220 initial filings. Knox and Hamilton counties saw 791 and 635 filings respectively. The four counties account for 5,514 new entity filings during the third quarter, which is a 7.8 percent increase compared to the same time in 2016.
The report made no mention of economic conditions in the Tri-Cities area.
Still, the state’s unemployment remains at a record-breaking three percent in October after first hitting the milestone in September. Tennessee’s unemployment rate is now well below the current national average of 4.1 percent.
Gov. Bill Haslam reported this month the state has added more than 392,000 jobs since 2011.
The national economy grew three percent in the third quarter compared to the quarter before it thanks to more jobs, growing housing starts, declining auto sales and falling gas prices nationally, the report pointed out.
During a conference call with reporters, Fox responded to these questions:
Do you see any economic slowdown on the horizon?
“We don’t have a slowdown or a recession. We believe all the indicators … are doing very well. What comes out of the tax reform package … could be the good creation of jobs, housing prices rising … consumers having more money to spend … because the economy is so healthy, we can’t expand at the same rates.”
What about inflation given the employment numbers? Will it rise?
“If I were to pick out one single thing that’s been a surprise to economists … it’s been the inflation rates. You would think they would have come up, but they have not … what I do expect is as this labor market tightens, inflation rates will surely come up. If the fed (federal reserve) will raise short-term interest rates to keep inflation from getting out of hand … that’s the question.”
How would Tennessee fare if labor costs begin to rise?
“I don’t think there is any reason to believe we would be hit … what I expect is because we have done such a good job of creating employment, I would anticipate a little bit higher salary increases … but we’re still going to be below average wages so I can’t imagine that changing our competitive position … what we’re seeing is some wage inflation because the economy is so healthy.”