Labor Market Information
The Knoxville MSA’s unemployment rate in November was 2.6% (this was lower than October’s 2.8% rate and lower than the COVID-related 4.3% rate from November 2020.) Knox County’s unemployment rate in November was 2.4% (down from 2.7% in October and down from 4% in November 2020.) Tennessee’s unemployment rate was 3.1% in November (down from 3.3% in October and down from 5.1% in last November.) The U.S. unemployment rate was 3.9% in November (down from the 4.3% rate in October and down from the 6.4% unemployment rate recorded last November.)
The size of the total labor force slightly increased from October to November at the local, state, and national level. The Knoxville MSA’s labor force increased 1% (from 430,464 in October to 434,827 in November.) Knox County’s labor force increased 1.1% (from 245,169 in October to 247,806 in November.) Tennessee’s labor force increased 0.9% (from 3,295,071 in October to 3,325,867 in November.) The national labor force increased 0.1% (from 161,862,000 in October to 162,099,000 in November.)
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)
For the month of November, there were 44,935 unique active job postings in the Knoxville MSA (up 5.3% from October and up 44.4% from last November.) There were 28,717 unique active job postings in Knox County (up 5.5% from October and up 49.5% from this time last year.)
The Top 10 industries (by number of job postings) in the Knoxville MSA in November were –
The Top 10 occupations (by number of job postings) in the Knoxville MSA in November were –
You can view the 13-month job postings trend for Knox County and the Knoxville MSA below.
(Source: EMSI Job Postings Analytics)
ADP National Employment Report®
Each month, ADP, a large-scale payroll and human resources company releases their National Employment Report®, which provides a high-level look at month-over-month private-sector employment changes across the country.
The November report shows a gain of 534,000 in nonfarm private-sector employment (a decrease from the 571,000 jobs gain reported in October.) Large firms (500+ employees) posted the largest gain of 277,000 jobs. Midsized businesses (50-499 employees) gained 142,000 jobs and small businesses (1-49 employees) increased by 115,000 jobs.
ADP’s Small Business Report, which further synthesizes the small business landscape, shows that the 115,000 jobs gain was driven mostly by the “Very Small” businesses (1-19 employees) which increased by 62,000 jobs. “Other Small” businesses (20-49 employees) increased by 53,000 jobs.
Worker Shortage Continues
The regional worker shortage continues as the Knoxville MSA’s labor force only increased slightly by 1% from 430,464 in October to 434,827 in November while the total number of job openings increased 5.3% from 42,675 in October to 44,935 in November. Meanwhile, the Knoxville MSA’s unemployment estimate (or number of available workers) has decreased 6.3% from 12,155 in October to 11,387 in November. This currently means that if every unemployed person in the Knoxville MSA got hired today, they would only be able to fill 25% of the job openings, leaving 75% of open job positions unfilled.
The labor shortages are persisting longer than many economists expected. Businesses and policymakers were hoping that the expiration of the extra $300 weekly unemployment benefit was going to cause a massive movement of jobless Americans to return to work. The extra federal unemployment benefit officially ended September 6th nationally and yet there has not been a significant influx of job applicants. Instead, the total workforce has continued to mostly shrink (or grow sparingly) at the national, state, and local levels.
According to a U.S. Chamber of Commerce survey of 529 Americans who have become unemployed during the pandemic and have not returned to work conducted in November, 53% said they were only “somewhat active,” “not very active,” or “not very active at all” in looking for work. Almost two-thirds (65%) did not expect to be back working before the new year and 8% indicated that they never plan to go back to work. One in three are not expecting to return to work before Q2 2022. About a third of respondents (32%) indicated that they were looking to switch industries. Thirteen percent left multiple jobs during the pandemic (with 57% of those holding their most recent position for three months or less.) Industries in which more than 50% of respondents were “strongly active” in searching for a new job include Hospitality (55%), Health Services (54%), and Manufacturing (51%). Industries in which less than 50% of respondents were “strongly active” in searching for a new job include Construction (46%), Retail (41%), and Trade/Transportation/Utilities (39%). Those last three industry sectors align with several other crises we’re all currently experiencing like the affordable housing shortage, understaffed stores, supply chain backlogs, limited or lack of inventory, etc. The U.S. Chamber survey also concluded that hiring bonuses of $1,000, flexible work hours, the ability to work from home, and a positive work environment are all incentives that seem the most likely to bring unemployed workers back. You can read more and download the full report here.
We can continue to expect more increasing pressure on wages, sign-up bonuses, job flexibility, and childcare options. As a region, we must figure out how we can significantly increase the size of our local labor force through talent attraction (recruiting more people aged 25-54 to our region), talent retention (keeping recent college graduates and people aged 25-54 here), and immigration reform (increasing work visas and the ability to recruit specialized talent from abroad) in order to meet our region’s ever increasing job demand.
Consumer Price Index (CPI – Inflation Rates)
The national inflation rate from November 2020 to November 2021 is 6.8%. This is up from the 6.2% rate from October 2020 to October 2021. Last year, the national inflation rate was 1.2% from November 2019 to November 2020. Higher inflation has persisted longer than the Feds expected with price increases hitting a 39-year high last month. You can read more here. The Federal Reserve Board has agreed to clear the way for earlier and faster interest rate increases in 2022 by accelerating the phaseout of its bond-buying stimulus. The Fed’s policymaking committee had been keeping its benchmark rate near zero but now projects three interest rate hikes next year, three more increases in 2023 and two in 2024. That would push the rate to 2.1% by the end of 2024. You can read more about the Fed’s future rate increases 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 7.5% for the November 2020 to November 2021 period. This is up from 6.9% in the October 2020 to October 2021 period. Last year, the rate was 1.3% for November 2019 to November 2020.
(Source: U.S. Bureau of Labor Statistics; Consumer Price Index, not seasonally adjusted)
Home sales in the Knoxville area increased 9.9% in November to a seasonally adjusted annual rate (SAAR) of 26,947. The Knoxville area recorded more home sales in November 2021 than any other November on record. Similarly, home sales in Knox County rose 4.1% from the previous month to a seasonally adjusted annual rate (SAAR) of 10,100. Home sales were up 11.2% in the Knoxville area and 0.3% in Knox County compared to the previous year.
Nationally, existing-home sales increased to a seasonally adjusted annual rate of 6.46 million in November — up 1.9% from the previous month but down 2.0% from a year ago. Home sales in the South rose 2.9% from the previous month and 1.1% from one year ago.
The median home sales price in the Knoxville area was $295,000 in November — up 21.6% from one year ago. Knox County’s median home sale price was $310,000 – an increase of 19.2% from one year ago.
Thirty-eight percent of homes sold for over asking price in November, down from 39% the previous month. 20.1% of homes sold for at least $10,000 over asking price and 7.1% sold for at least $25,000 over asking price. New construction (i.e. “Never Occupied,” “To Be Built,” “Under Construction,” or “Under Roof”) represented 8.8% of total home sales, though move-in ready homes accounted for a smaller percentage of all new construction sales.
The number of active listings has fallen dramatically in the past few months, down more than 25% since September. In the Knoxville area, total inventory was down around 27% from a year ago and nearly 50% from pre-pandemic levels. Half of homes sold in the Knoxville area were on the market for 6 days or less, down from 8 days in November 2020.
Months of inventory, or the number of months it would take to exhaust active listings at the current sales rate, continues to hover around 1 month. In other words, the total volume of home sales each month is roughly equivalent to overall inventory.
According to Hancen Sale, Governmental Affairs and Policy Director at the Knoxville Area Association of Realtors®, “November 2021 ranks as one of the strongest on record for the Knoxville area housing market, experiencing record-breaking home sales and quickly rising home prices. It appears the threat of higher mortgage rates has spurred more activity among buyers rushing to “lock-in” while rates remain near historic lows. Since October, some 15-20% more homes go under contract than are being added to the market each week. As long as this supply-demand gap persists, I suspect home prices will continue to climb.”
Knoxville Area Association of REALTORS® (KAAR) 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.
The National Association of Realtors® (NAR) recently released a report, 2022 Housing Market Hidden Gems, in which the Knoxville MSA was listed as one of 15 metro areas that experienced the most net migration gains in the first half of 2021 based on NAR’s analysis of U.S. Postal Service data. The Knoxville MSA also made NAR’s list of the Top 10 Undervalued Metro Area Housing Markets in 2021 coming in at #5. The report notes about Knoxville – “This metro area has one of the most affordable home prices, with the median value of property at $228,878, so it is attracting movers into the area. In 2020, nearly 10,000 people moved into the area. Home prices are rising fast at a cumulative 3-year pace of 22.4% as of 2021 Q3, outpacing the cumulative wage growth of 16.5%. Like the Daphne (Alabama) metro area, access to broadband services is relatively low, with just 66.6% of households with broadband services; improved opportunity to access broadband services can encourage more businesses and workers to relocate to the area, especially those wanting to work from home.” The Knoxville Chamber is helping to address the broadband coverage issue as part of the eKnox Broadband Task Force which is working to create more options toward the goal of achieving 100 percent broadband connectivity for every household in the Knoxville MSA. You can read more here.
(Sources: National Association of Realtors®; Knoxville Area Association of 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 November 2021 was $649.3 billion (up 2.3% from October and up 18.3% from last November.)
All retail sectors showed growth from this time last year. The retail sectors that showed the greatest growth from last November were Gasoline Stations (+57.3%), Clothing Stores (+42.9%), Food Services and Drinking Places (+39.2%), Miscellaneous Stores (+28.3%), Sporting Goods/Books/Hobby/Music Stores (+23.0%), Furniture and Home Furnishings Stores (+22.6%), Motor Vehicle and Parts Sales (+15.0%), General Merchandise Stores (+14.6%), and Food and Beverage Stores (+10.1%).
Retail sectors seem to continue to benefit from pent up customer demand and increasing leisure travel.
(Sources: U.S. Census Bureau; Advance Monthly Retail Trade Reports, not adjusted)
Tennessee State and Local Sales Tax Collections
The Knoxville MSA region collected $110.54 million in state sales taxes in November (up 0.5% from October and up 14.9% from last November) and Knox County collected $71.47 million in November (up 2.2% from October and up 17.1% from last November.) The state of Tennessee collected $1.029 billion in state sales taxes in November (up 0.7% from October and up 17.6% from last November.)
The Knoxville MSA collected $39.56 million in local sales taxes in November (up 1.1% from October and up 17.9% from last November) and Knox County collected $24.106 million (up 2.8% from October and up 19.1% from last November.)
These significant increases in state and local sales tax collections from last year indicate that consumer spending continues to be strong.
(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@example.com.
New and existing industries continue to invest in the Knoxville region.
December 5, 2021 – Yee-Haw Brewing Company announced plans to open a brewery and taproom in the spring of 2022 at the former Elkmont Exchange brewery in North Knoxville. Yee-Haw is one of the most recognizable beer brands in Tennessee and Knoxville is their largest market for sales. The new Knoxville location will create close to 100 new jobs and have one of the largest barrel operations in East Tennessee. Yee-Haw has other locations in Johnson City, Nashville, Pigeon Forge, and Greenville, South Carolina. Their products are also available in grocery stores and craft beer markets throughout East and Middle Tennessee. You can read more here.
Knox County Business Licenses
New business licenses issued in November 2021 by Knox County are up 3.2% from November 2020 during the pandemic and are down 17.9% from the pre-pandemic November 2019 count.
A total of 161 new business licenses were issued in November 2021 compared to 156 in November 2020 and 196 in November 2019. The top industry sectors for which business licenses were issued in November 2021 were services, construction, retail, and non-classified establishments.
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 214,537 passengers in October (up 17.1% from September’s passenger traffic and up 77.3% from COVID-ravaged October 2020 but down 12.2% from pre-COVID October 2019.)
According to the Transportation Security Administration, the average daily number of passengers passing through the nation’s TSA checkpoints in November was 1,921,472 (up 127.3% from the November 2020 daily passenger average of 845,239 but still down 16% from the pre-COVID November 2019 average of 2,286,951.) You can view the daily TSA checkpoint travel numbers here.
According to the International Air Transport Association (IATA), October 2021 passenger volumes in the domestic U.S. market are down 10.5% from pre-COVID October 2019. This is an improvement from the negative difference of 13.1% from September 2019 to September 2021. You can view IATA’s full State of the Regions for the Americas briefing for December 2021 here.
The total freight recorded in October at TYS was 7,478,227 tons (down 0.2% from September and down 2.4% from last October.)
(Sources: Metropolitan Knoxville Airport Authority; U.S. Transportation Security Administration)