Is Tennessee’s Rising Unemployment Rate A Data Glitch?

Economists say they’re getting conflicting data that shows an improving job market even as unemployment rates rise. Manufacturing has been on the rise, with new jobs added at Nissan’s plant in Smyrna. Government jobs have taken the biggest hit. Credit: Nissan

Tennessee’s top labor economists are having a hard time explaining what’s going on with the state’s unemployment rate. It continues to rise even as the number of people filing for unemployment benefits drops.

The state’s unemployment rate has gone up for six months straight, and it’s not just that more people have restarted their job searches.

Middle Tennessee State University’s David Penn says there may be a problem with some of the household survey data that feed into the unemployment rate.

“I think it’s more of a glitch in the figures than it is reflective of actual labor market conditions.”

If it’s not a problem with the data, Penn says it’s difficult to explain why Tennessee increasingly lags the national economy. The U.S. jobless rate of 7.6 percent is now nearly a full point better than Tennessee’s 8.5 percent.

The state did lose more than 16,000 jobs in June – the largest monthly decline since 2009. MTSU’s Business and Economic Research Center primarily blames the federal budget sequester. But that cutback in government spending has been felt in every state.