Local Business Descriptions of the Current Economic Environment
In addition to the regular quarterly questions, survey participants were asked to describe the current economic environment in one word. The majority (56%) of respondents used positive terms like “good,” “improved,” “stable,” and “fair.” The remaining 44% used negative terms like “down,” “slow,” “choppy,” and “uncertain.”
Labor Market Information
The Knoxville MSA’s unemployment rate in June was 3.8% (up from 3.0% in May and up from 3.4% in June 2024.) Knox County’s unemployment rate in June was 3.7% (up from 3.3% in May and up from 3.2% in June 2024.) Tennessee’s unemployment rate was 4.1% in June (up from 3.3% in May and up from 3.7% in last June.) The U.S. unemployment rate was 4.4% in June (up from 4.0% in May and up from 4.3% in last June.)
The size of the total labor force slightly increased from May to June at the local, state, and national levels. Knox County’s labor force increased 0.3% from 259,993 in May to 260,786 in June. The Knoxville MSA’s labor force increased 0.3% from 462,165 in May to 463,639 in June. Tennessee’s labor force increased 0.3% from 3,486,543 in May to 3,495,698 in June. The national labor force increased 0.7% from 170,216,000 in May to 171,343,000 in June.
Below is the 13-month unemployment rates trending comparison for the four largest MSA’s in Tennessee –
(Source: U.S. Bureau of Labor Statistics; Tennessee Dept. of Labor & Workforce Development)
Job Market
For the month of June, there were 9,889 unique active job postings in the Knoxville MSA (up 7.0% from May and up 6.8% from last June.) There were 5,976 unique active job postings in Knox County (up 2.8% from May and down 3.3% from this time last year.)
The Top 10 industries (by number of job postings) in the Knoxville MSA in June were –
The Top 10 occupations (by number of job postings) in the Knoxville MSA in June were –
You can view the 13-month job postings trend for Knox County and the Knoxville MSA below.
(Source: Lightcast – formerly Emsi Burning Glass)
Knoxville Designated as a “Focused AI Mover” Metro by Brookings Institution
Brookings Institution recently released a new report that categorizes 387 metro areas into six different groupings based on three pillars of artificial intelligence (AI) pillars – talent, innovation, and adoption – that measure a region’s readiness for the next technological leap. The six metro groupings are “Superstars” that exhibit unmatched strength across all three AI pillars (only Silicon Valley currently meets this criteria), “Star Hubs” is a group of 28 metros that have uniformly strong AI ecosystems that balance top-tier talent, research, and enterprise uptake (Raleigh and Durham are in this group), “Emerging Centers” is a group of 14 metros that combine top performance in two of the AI pillars with one developing area (Nashville and Huntsville are included in this group), “Focused Movers” is a group of 29 metros that excel in one of the AI pillars while maintaining foundations in the other two (Knoxville, Chattanooga, and Greenville, SC are in this group), “Nascent Adopters” is a group of 79 metros that show moderate performance across all three pillars (Memphis, Lexington, and Asheville are in this group), and “Others” is a group of 43 metros that currently lag on multiple pillars. You can read and download the full report here.
ADP National Employment Report®
Each month, ADP, a large-scale payroll and human resources company, in collaboration with the Stanford Digital Economy Lab, releases the National Employment Report®, which provides a high-level look at month-over-month private-sector employment changes across the country.
The July report shows a net gain of 104,000 in private-sector employment (up from the 33,000 net jobs loss in June). Industry sectors showing positive job growth in July include Leisure and Hospitality (+46,000), Financial Activities (+28,000), Trade/Transportation/Utilities (+18,000), Construction (+15,000), Information (+9,000), Natural Resources and Mining (+9,000), Professional and Business Services (+9,000), Manufacturing (+7,000), and Other Services (+2,000). The only industry sector that showed negative job growth in July was Education and Health Services (-38,000).
By establishment size, mid-sized businesses (with 50-249 employees) gained 55,000 jobs, large businesses (with 500+ employees) gained 46,000 jobs, and “Very Small” businesses (with 1-19 employees) gained 22,000 jobs. Meanwhile, “Other Small” businesses (with 20-49 employees) lost 10,000 jobs and mid-sized businesses (with 250-499 employees) lost 9,000 jobs.
(Source: ADP)
Intuit QuickBooks Small Business Index
Each month, Intuit QuickBooks, the accounting software provider for small and medium-sized businesses, releases the Small Business Index Report, which analyzes employment and revenue trends for small businesses in the U.S. with one to nine employees across twelve industry sectors.
In July, there were 12,735,000 people employed by U.S. small businesses with one to nine employees, down 11,000 from June. Jobs were down in nine of the twelve industry sectors tracked by the Index including Leisure and Hospitality (-3,300), Retail Trade (-3,300), Transportation and Warehousing (-1,300), Education and Health Services (-1,100), Construction (-900), Manufacturing (-600), Information (-400), Finance and Real Estate (-200), and Wholesale Trade (-100). The only sector that showed job growth was Professional and Business Services (+100). The Utilities and Agriculture/Natural Resources/Mining sectors were unchanged.
Below is the 13-month total employment trend for U.S. small businesses with one to nine employees –
You can access the full report here.
(Source: Intuit QuickBooks)
Worker Shortage Update
The labor shortages are persisting longer than many economists expected. There continues to be high job demand and slower workforce growth resulting in fierce competition for talent and many open jobs going unfilled. According to the latest data from the U.S. Bureau of Labor Statistics (BLS), the nation had 7.4 million jobs to fill and only 5.2 million hires in June, leaving 2.2 million jobs unfilled.
In June, the largest increases in U.S. job openings were in retail trade (+190,000), professional and business services (+156,000), information (+67,000), arts/entertainment/recreation (+44,000), and construction (+14,000).
The largest decreases in job openings were in accommodation and food services (-308,000), health care and social assistance (-244,000), financial activities (-146,000), other services (-35,000), wholesale trade (-35,000), transportation/warehousing/utilities (-12,000), private educational services (-11,000), and manufacturing (-10,000).
It will take time for this mismatch between labor demand and supply to align. In the meantime, wages will continue to rise as businesses compete to attract talent. You can read the latest job openings summary from BLS here.
Consumer Price Index (CPI – Inflation Rates)
The national inflation rate from June 2024 to June 2025 is 2.7%. This is up from 2.4% in the May 2024 to May 2025 period. Last year, the national inflation rate was 3.0% from June 2023 to June 2024.
The June CPI report marks the thirty-sixth straight month that year-over-year inflation is below the June 2022 CPI peak high of 9.1%. High prices for some items will likely linger longer.
From a year ago, natural gas prices are up 14.2%, auto insurance is up 6.1%, electricity costs are up 5.8%, auto repair services are up 5.2%, housing prices are up 3.8%, eating out prices are up 3.8%, used car prices are up 2.8%, groceries are up 2.4%, and new vehicle prices are up 0.2%.
From a year ago, gasoline prices are down 8.3%, airline fares are down 3.5%, and apparel is down 0.5%.
The Federal Reserve decided to keep the federal funds rate at 4 ¼ to 4 ½ percent at its Federal Open Market Committee (FOMC) policy-setting meeting July 29-30. The Fed stated that “although swings in net exports have affected the data, recent indicators suggest that growth of economic activity moderated in the first half of the year. The unemployment rate remains low and labor market conditions remain solid. Inflation remains somewhat elevated.” The committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the long run. You can read more here.
Knoxville falls into the South Size Class B/C (population of 2.5 million or less) grouping. The current inflation rate for this region is 2.5% for the June 2024 to June 2025 period. This is up from 2.3% in the May 2024 to May 2025 period. Last year, the rate was 2.7% from June 2023 to June 2024.
(Source: U.S. Bureau of Labor Statistics; Consumer Price Index; Not Seasonally Adjusted)
Housing Market
Home sales in East Tennessee decreased 3.8% from May to June at a seasonally adjusted annual rate (SAAR) of 19,478. Despite the month-to-month decrease, June sales landed at a 12.9% increase over last year, with the first 6 months of the year cumulatively also an 0.4% increase over 2024. This is promising and indicates that some of the pent-up consumer demand is being realized.
June home sales in Knox County also decreased 8% month over month but increased 10.3% over 2024 at a seasonally adjusted annual rate (SAAR) of 7,362.
The median home sales price across the East Tennessee region was $377,700 in June, up 0.7% from a year ago. Knox County’s median home sale price rose to $414,900, an increase of 4% from a year ago.
Half of the homes sold across the East Tennessee region went under contract in 20 days or less, up from 13 days last year.
Active inventory in the East Tennessee region was up 37.7% from the previous year.
Months of inventory for East Tennessee, or the number of months it would take to exhaust active listings at the current sales rate, improved to 4.2 months.
You can subscribe to the East Tennessee REALTORS® monthly Market Pulse Newsletter here.
East Tennessee REALTORS® reports monthly home sales patterns using a seasonally adjusted annualized rate (SAAR), an adjusted rate that takes into account typical seasonal fluctuations in data and is expressed as an annual total. Comparing month-over-month housing market data using this method provides a more accurate depiction of home sales.
(Sources: National Association of REALTORS®; East Tennessee REALTORS®)
(Sources: U.S. Housing & Urban Development – SOCDS – State of the Cities Data Systems; U.S. Census Bureau – Building Permits Survey)
National Retail Sales
The total advance monthly retail sales estimate for June 2025 was $713.652 billion (down 5.2% from May and up 1.4% from last June.)
The retail sectors that showed sales growth from last June were Health and Personal Care Stores (+8.5%), Non-store Retailers (+3.6%), Food Services and Drinking Places (+2.8%), Motor Vehicles and Parts Sales (+1.9%), Miscellaneous Stores (+1.3%), Furniture and Home Furnishings Stores (+1.0%), and Food and Beverage Stores (+0.6%).
Retail sectors that showed a decline in sales from last June were Electronics and Appliance Stores (-3.5%), Gasoline Stations (-3.4%), Sporting Goods/Books/Hobby/Music Stores (-2.7%), Clothing Stores (-1.6%), and Building Materials (-0.8%). General Merchandise Stores sales were unchanged.
(Sources: U.S. Census Bureau; Advance Monthly Retail Trade Reports, not adjusted)
Tennessee State and Local Sales Tax Collections
The Knoxville MSA region collected $137.413 million in state sales taxes in June (up 1.0% from May and up 3.3% from last June) and Knox County collected $86.706 million in June (down 1.8% from May and up 1.1% from last June.) The state of Tennessee collected $1.262 billion in state sales taxes in June (up 0.4% from May and up 2.8% from last June.)
The Knoxville MSA collected $49.687 million in local sales taxes in June (up 0.4% from May and up 5.9% from last June) and Knox County collected $29.673 million (down 1.8% from May and up 3.9% from last June.)
(Source: Tennessee Department of Revenue)
Recent Business Expansions and New Business Announcements in the Knoxville Region
In this section of ECO, we share announcements of businesses that are expanding their existing operations or locating a new facility in the Knoxville region. If you would like to share your business expansion announcement with us, please send your info to [email protected].
New and existing industries continue to invest in the Knoxville region.
July 9, 2025 – SkyNano, a Knoxville area based leader in sustainable materials innovation, has been awarded a $1.6 million Phase II Small Business Innovation Research (SBIR) grant from the U.S. Department of Energy (DOE). This add-on grant will help commercialize the substantial progress in production made during Phase I of the $3.5 million U.S. DOE contract awarded in late 2024 for a project titled “Tailored Ultra-Low-Carbon Concrete Enabled by Nanocarbon Additives Produced from Recycled Kiln CO2.” You can read more here and here.
July 10, 2025 – Clayton Supply, a division of Clayton – a leading national single-family homebuilder, announced a $6.8 million expansion of its door manufacturing operation (Clayton Morristown Lux Doors) in Morristown. The expansion will add 90 new jobs, nearly doubling the current headcount. You can read more here.
July 21, 2025 – TreisD Corporation, an Atlanta-based 3D technology startup, announced plans to occupy a 20,000-square-foot building in Eastbridge Business Park in Mascot to make products using polymer plastics. The company turns 2D images into 3D images that can then be printed on a film that can’t be replicated. The company will bring 50 jobs here. You can read more here.
Knox County Business Licenses
New business licenses issued in June 2025 by Knox County are down 8.9% from May and are down 6.3% from June 2024.
A total of 236 new business licenses were issued in June 2025 compared to 259 in May and 252 in June 2024. The top industry sectors for which business licenses were issued in June 2025 were services, retail, and construction.
Below is a chart showing the 13-month trend of business licenses issued by Knox County.
(Sources: Knox County Clerk)
McGhee Tyson Airport (TYS) Passenger and Freight Trends
The Metropolitan Knoxville Airport Authority recorded 349,303 passengers in June (up 7.9% from May’s passenger traffic of 323,713 and up 7.1% from June 2024.) The June 2025 passenger count set a new all-time record for TYS Airport.
The total freight recorded in June at TYS was 4,531,576 pounds (down 10.1% from May and down 23.4% from last June.)
According to the Transportation Security Administration, the average daily number of passengers passing through the nation’s TSA checkpoints in June was 2,710,400 (down 1.0% from the June 2024 daily passenger average of 2,737,503 and up 6.5% from the pre-COVID June 2019 average of 2,544,141.) You can view the daily TSA checkpoint travel numbers here.
According to the International Air Transport Association (IATA) , “The U.S. domestic market, the world’s largest in RPK (Revenue-Passenger-Kilometers) terms, expanded 0.1% YoY in June. This comes after four consecutive months of contraction and drove the return to growth in total North American RPK. U.S. domestic capacity increased 1.8% YoY and resulted in a 1.5 percentage point drop in PLF (Passenger Load Factor) YoY to 86.0%. While the U.S. domestic PLF has declined YoY every month in the first half of 2025, it was still above the industry domestic PLF and highest among major domestic markets in June.” You can read more here.
(Sources: Metropolitan Knoxville Airport Authority; U.S. Transportation Security Administration; International Air Transport Association)
