January jobless rate the lowest in 22 years

Unemployment in the Chattanooga area edged higher in January due to the normal seasonal drop in retail and other holiday-related hirings, but the new year began with the lowest jobless rate in Chattanooga in more than two decades.

Despite higher interest rates from the Federal Reserve Board’s efforts to slow the economy, unemployment in the six-county Chattanooga metropolitan area averaged 3.4% during January, according to data released Thursday by the Tennessee Department of Labor and Workforce Development. January’s jobless rate in Chattanooga was up from the 2.9% rate in December but still a half percent lower than a year ago.

Chattanooga’s jobless rate was also below the state and national averages during January and was the lowest for the month since 2001, when the January rate was also at 3.4%.

Chattanooga’s metro unemployment rate in January was below the rate in Memphis but still slightly above what it was in both the Nashville and Knoxville markets.

“The labor market continues to be rather robust in Tennessee, and while the county rates vary some, I think we still remain quite strong,” Don Bruce, director of the Boyd Center for Economic Research at the University of Tennessee, said in a telephone interview Thursday after the new jobs numbers were released. “We haven’t seen the slowdown in the labor markets that many had expected with the Fed’s actions, and Tennessee continues to remain strong with the influx of businesses and people moving into the state.”

With an aging workforce, the labor force participation rate that measures the share of prime-age adults who are working or looking for a job has remained below 60% in Tennessee, which is lower than historic norms, especially during a period of relatively low unemployment.

Finding enough workers remains a challenge for many employers. On Thursday, Tennessee career centers reported 367,004 open positions across the state, or nearly four times as many jobs as the number of unemployed people still actively looking for a job.

A new survey from The Harris Poll commissioned by the staffing company Express Employment Professionals found 91% of U.S. companies expect to face challenges in hiring this year,

including 45% of hiring managers who say they have open positions they cannot fill.

Those who have open positions still unfilled say it is due to a lack of applicants. This includes applicants with relevant experience (47%), hard skills (46%), applicants in general (40%) and/or soft skills (31%).

“The lack of workers, particularly qualified workers, in America should raise red flags for everyone from the government and educators to businesses and parents,” Express Employment International CEO Bill Stoller said in a report this week. “This is a crisis that has been building for years, and the fallout is only just beginning if we don’t invest in creating more qualified employees through training and education.”

Stoller said employers also are seeing more employee turnover as workers look for different or higher-paying jobs.

“Unfortunately, each year, employee turnover costs companies an average of $62,542 (e.g., cost to rehire, lost productivity), and nearly a quarter (23%) say it costs their company $100,000 or more per year,” Stoller said.