State Report Forecasts Slow But Steady Job Growth for 2011

The state’s unemployment rate is expected to stay above nine percent this year, according to an annual economic forecast for the governor. Economic recovery will be slow but steady.

Tennessee’s economic performance will be roughly the same as the nation as a whole, but it will be at least 2012 before unemployment drops below nine percent.

University of Tennessee economist Matt Murray, who authored the state forecast, says the plentiful jobs of the mid-2000s are still years off.

“It won’t likely be until 2014 that levels of employment return to where they were before the recession.”

From 2007 to 2009, Tennessee lost more jobs, proportionally than the nation and the southeast. Last year, Maury County had the state’s largest job losses, down more than 12 percent. However, by 2010, a third of Tennessee counties started posting job gains.

A crippled housing market is standing in the way of a speedier economic rebound in Tennessee.

A housing and construction bubble helped push the country into recession. And Murray says now the glut of homes on the market is preventing a typical recovery, where construction leads to jobs which lead to more tax revenue.

“The situation here is not nearly as dire as the case in other states around the country, in particular places like Arizona, California and Florida, and I’ll throw Nevada in there as well.”

Murray’s report to the governor says building permits have bottomed out for the country as a whole and have actually turned a corner in Tennessee. Permits are now increasing from a low point that was just a quarter of pre-recession levels.

Read the report here.