Tri-Cities region adds 5,300 jobs
Sharon Caskey Hayes
May 23, 2007 at 12:00 AM
The Tri-Cities gained more than 5,300 jobs in the first quarter this year, marking the eighth consecutive quarter of employment growth in the region.
The latest labor market report issued Wednesday by East Tennessee State University shows that 5,335 jobs were added to the region’s employment base in the first quarter versus the same time last year, while the unemployment rate fell 5.45 percent to 4.78 percent.
Johnson City led employment growth with 1,398 new jobs in the period, and its unemployment rate fell 6.55 percent to 4.69 percent.
Kingsport added 1,002 jobs to its employment base in the quarter, while its unemployment rate fell 7.17 percent to 4.63 percent.
And Bristol gained 550 jobs in the period, while its unemployment rate fell 4.13 percent to 4.71 percent.
“This marks the eighth quarter in a row of employment growth, and the fifth quarter where the increase has topped 2 percent,” said ETSU economist Steb Hipple.
The region posted job gains in eight of the 14 industrial sectors. Jobs were added in government, retail trade, education and health services, information services, finance, construction, leisure and hospitality, and other services.
Job losses were felt in professional and business services, durable and nondurable manufacturing, and wholesale trade.
Employment was unchanged in transportation and utilities, and the mining sector.
“Overall, local business conditions should continue to be robust over the immediate future,” Hipple said.
The regional labor market report reflects strong performance on the national level. Nationally, job levels rose for the 19th consecutive quarter, while the unemployment rate fell 2.63 percent to 4.82 percent.
On the national level, 11 of the 14 industrial sectors posted job gains. Professional and business services, education and health services, leisure and hospitality services, government, finance, wholesale trade, and transportation and utilities led job gains. Mining, information services, other services, and retail trade posted smaller employment increases.
Job losses were limited to nondurable and durable goods manufacturing and construction.
Hipple said the employment declines in manufacturing and construction are a cause for concern. He noted that during the early years of the nation’s current business expansion construction was strong, and in 2006 manufacturing posted some small employment gains.
“These conditions have changed, and the goods-producing sector has become a drag on the national economy,” Hipple said.
He said the strong labor market performance can’t last forever, and the national business expansion is already “showing signs of aging.”
“Job creation in the U.S. has been around the 2 percent level for the past two years. ... This rate of job expansion is not sustainable since it exceeds the natural rate of growth of the labor markets — 1 percent,” Hipple said. “When labor markets get too tight, this will lead to inflationary pressures driven by higher labor costs.”
He said the Federal Reserve System is monitoring labor market conditions and could raise interest rates to combat inflation and sustain the business expansion.
The labor market report is based on the 2006 Benchmark of the Current Population Survey of the U.S. Department of Labor. The report is available online at http://faculty.etsu.edu/hipples.