State Unemployment Rate Continues to Climb

The state unemployment rate rose in June to a rate not seen since the early 90s.

The department of labor announced today that unemployment rose to 6.5 percent last month. That’s one point higher than the national rate, which held steady at 5.5 percent.

In May, the state unemployment rate jumped a full percentage point to the highest level in 16 years.

Middle Tennessee State University economist David Penn says the numbers confirm a decline in the state’s economy.

“Frankly I’d hoped that the May number of 6.4 percent was an aberration, but this figure is right up there, so it looks like indeed the state’s economy weakened considerably in the last couple of months.”

The state unemployment rate has risen nearly 2 percent since last year. In comparison, the national rate rose only half that.

The manufacturing sector in Tennessee has been hit the hardest, down 8,600 jobs since last June.

Vanderbilt University economist Malcolm Getz says the numbers are a result of the combination of high gas prices and the nationwide credit crisis.

“It’s going to be harder to find a job for those people who are looking for employment, harder to change jobs, so people are going to feel a little less secure and are more likely to pull back on expenditures.”

Despite the rise, Getz says it’s not time to panic. Unemployment in Tennessee reached its highest rate ever, nearly 12 percent, in 1982.