Experiences of Businesses Regarding Job Fairs
In addition to our regular monthly survey questions, we asked respondents if they had participated in any job fairs over the past year and if they did, to rate their experience and if they did not participate in any job fairs, why not.
The majority of respondents (69%) indicated that they did not participate in any job fairs. Reasons for not participating include: no need (fully staffed), anticipation that there would be no skilled workers in attendance for their specific industry (i.e. marine/boat service), part of an industry in which candidates come directly to them (i.e. engineers), business does not have enough staff to cover job fairs, and businesses that operate in a specific industry do not find value in general job fairs.
Of the respondents that did participate in a job fair, the majority (60%) indicated having a “neutral’ experience, 40% indicated having a “positive” experience, and no respondents indicated having a “negative” experience. Respondents that had a “neutral” experience commented that there were too many open positions for too few qualified candidates. Respondents that had a “positive” experience indicated that they saw a significant increase in the number of job candidates.
Labor Market Information
Data Note: January labor force data at the local level will not be released until mid-March. Below is the December analysis from last month’s ECO report.
The Knoxville MSA’s unemployment rate in December was 2.9% (this was higher than November’s 2.6% rate and lower than the COVID-related 5.6% rate from December 2020.) Knox County’s unemployment rate in December was 2.6% (up from 2.4% in November and down from 5.2% in December 2020.) Tennessee’s unemployment rate was 3.3% in December (up from 3.1% in November and down from 5.6% in last December.) The U.S. unemployment rate was 3.7% in December (down from the 3.9% rate in November and down from the 6.8% unemployment rate recorded last December.)
The size of the total labor force slightly increased from November to December at the local and state level. The Knoxville MSA’s labor force increased 0.6% (from 434,827 in November to 437,351 in December.) Knox County’s labor force increased 0.6% (from 247,806 in November to 249,357 in December.) Tennessee’s labor force increased 0.7% (from 3,325,867 in November to 3,348,942 in December.) Meanwhile, the national labor force slightly decreased 0.2% (from 162,099,000 in November to 161,696,000 in December.)
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
Data Note: Emsi, our source for job postings data in ECO – financed by First Horizon Bank, has merged with Burning Glass and is now using a new integrated feed for job postings data that allows for further deduplication of job postings, better employer tagging, and improved industry classification. This new feed for job postings data has resulted in revised estimates of both current and past job postings estimates. Beginning with this month’s ECO report, you will notice the job posting estimates are much lower than past reports due to the enhanced deduplication process by Emsi Burning Glass. Analysis for the December estimates, top 10 job posting industries, top 10 occupations, and the 13-month job posting trends for Knox County and Knoxville MSA have all been updated to reflect Emsi Burning Glass’ new methodology.
For the month of January, there were 9,957 unique active job postings in the Knoxville MSA (down 4.7% from December and up 35.1% from last January.) There were 6,861 unique active job postings in Knox County (down 2.3% from December and up 37.8% from this time last year.)
The Top 10 industries (by number of job postings) in the Knoxville MSA in January were –
The Top 10 occupations (by number of job postings) in the Knoxville MSA in January 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 January report shows a loss of 301,000 in nonfarm private-sector employment (a significant decrease from the 807,000 jobs gain reported in December.) Small businesses (1-49 employees) posted the largest loss of 144,000 jobs. Large firms (500+ employees) lost 98,000 jobs and midsized businesses (50-499 employees) lost 59,000 jobs.
ADP’s Small Business Report, which further synthesizes the small business landscape, shows that the 144,000 jobs loss was driven mostly by the “Very Small” businesses (1-19 employees) which decreased by 106,000 jobs. “Other Small” businesses (20-49 employees) decreased by 38,000 jobs.
(Source: ADP)
Worker Shortage Update
The labor shortages are persisting longer than many economists expected. The total workforce has continued to mostly shrink (or grow sparingly) at the national, state, and local levels.
One of the contributing factors to the worker shortage is the “Great Retirement” of the nation’s baby boomers (which we spotlighted in last month’s ECO report.) Another contributing factor is the “Great Resignation” (or what Bharat Ramamurti, the National Economic Council Deputy Director, recently coined “The Great Upgrade.”) There is a lot of churn in the nation’s job market as a record number of American workers are quitting their jobs. In 2021, there was a total of 68.9 million worker separations (of which 47.4 million workers – or 69% – voluntarily quit their jobs.) Goldman Sachs economists have estimated that 2.5 million people are “missing from the workforce” (of which, 800,000 were financially able to retire early.) This leaves 1.7 million people (many of which are “prime age” 25-54) to bring back into the job market. Many of these people are most likely not returning to the same jobs that they quit. Instead, they are holding out to get the best deal for themselves (or “upgrade” as NEC Deputy Director Ramamurti says) as many companies are competing to attract new talent with higher wages, signing bonuses, offering flexible schedules, and in some cases offering to pay student debt benefits. Job-seekers continue to be in the driver’s seat for now and companies are being forced to pay up. You can read more 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.
Knoxville MSA Lags Behind Other Metros in Retaining College Graduates
According to a recent study by Heartland Forward, an Arkansas-based economic development think tank, 29.9% of adults in the Knoxville MSA have at least a bachelor’s degree. Overall, Knoxville ranked 137th out of 380 metropolitan areas in the nation.
Most concerning is that the share of adults aged 25-54 in the Knoxville MSA with college degrees rose only 1.1% from 2010 to 2019, a slower rate than 338 other metropolitan areas and last among the peer communities tracked by the Knoxville Chamber.
This means that even though the University of Tennessee produces about 7,000 graduates per year, we’re only able to grow the region’s college-degreed talent pool by about 1 percent.
One way that Knoxville could recruit and retain new college graduates would be by having local amenities that would appeal to them such as the planned multi-purpose stadium in the Old City, which will host minor-league baseball, soccer, concerts, festivals, and other events.
There is also a misalignment between the degree programs that produce a high number of graduates versus the jobs that are locally available. For example, many local employers need workers with computer science degrees, but UT only graduates 35 to 50 per year. UT’s nationally ranked supply chain management program, however, cranks out about 400 graduates annually, far more than the local market needs. The Knoxville Chamber continues to engage with UT about the region’s business needs and is making progress, particularly in the field of data analysis.
The Chamber encourages local businesses to increase the number of internships they offer as another way to retain more college graduates in the region. Each year, the Knoxville Chamber hosts Explore, a free program to engage college interns and local college students with all that Knoxville and its surrounding communities have to offer. The program is designed to help interns build a community of peers and learn why the Knoxville region is a great place to begin their careers. You can learn more about the Explore intern program here and more about how to develop internships here.
Consumer Price Index (CPI – Inflation Rates)
The national inflation rate from January 2021 to January 2022 is 7.5%. This is up from the 7.0% rate from December 2020 to December 2021. Last year, the national inflation rate was 1.4% from January 2020 to January 2021. Higher inflation is primarily being driven by the supply chain disruptions and pent-up consumer demand for goods and has persisted longer than the Feds expected with price increases hitting 40-year highs. The Federal Reserve Board announced plans at the December meeting of the Federal Open Market Committee to accelerate its ending of bond purchases, which were used as emergency support for the economy during the COVID-19 pandemic. By ending the bond purchasing program, the central bank can start raising interest rates. The federal funds rate could see increases as early as the spring of 2022 and the Fed could hike rates three or four times this year to fight inflation. 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 7.8% for the January 2021 to January 2022 period. This is up from 7.4% in the December 2020 to December 2021 period. Last year, the rate was 1.7% for January 2020 to January 2021.
(Source: U.S. Bureau of Labor Statistics; Consumer Price Index, not seasonally adjusted)
Housing Market
Home sales in the Knoxville area increased 7.6% in January to a seasonally adjusted annual rate (SAAR) of 27,230. Similarly, home sales in Knox County rose 8.8% from the previous month to a seasonally adjusted annual rate (SAAR) of 10,440. Home sales were up 3.0% in the Knoxville area and down 7.5% in Knox County compared to the previous year.
Nationally, existing-home sales increased to a seasonally-adjusted annual rate of 6.5 million in January — up 6.7% from the previous month but down 2.3% from a year ago. Home sales in the South rose 9.3% from the previous month and 0.3% from one year ago.
The median home sales price in the Knoxville area was $300,000 in January— up 25.1% from one year ago. Knox County’s median home sale price was $300,000 – an increase of 20.0% from one year ago.
Thirty-six percent of homes sold for over asking price in January. 21% of homes sold for at least $10,000 over asking price and 9.2% sold for at least $25,000 over asking price. New construction (i.e. “Never Occupied,” “To Be Built,” “Under Construction,” or “Under Roof”) represented 9.3% of total home sales, though move-in ready homes accounted for a smaller percentage of all new construction sales.
In the Knoxville area, total inventory was down around 38% from a year ago and more than 50% from pre-pandemic levels. Half of homes sold in the Knoxville area were on the market for 6 days or less.
Months of inventory, or the number of months it would take to exhaust active listings at the current sales rate, fell to 0.6 months.
According to Hancen Sale, Governmental Affairs and Policy Director at the Knoxville Area Association of Realtors®, “Despite rising mortgage rates, the housing market continues to perform well with month-over-month gains in both the Knoxville area and Knox County. However, home sales in Knox County declined from the previous year due to lack of available inventory.”
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.
(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 January 2022 was $580.89 billion (down 18.8% from December and up 13.9% from last January.)
All retail sectors (except Electronics and Appliances) showed growth from this time last year. The retail sectors that showed the greatest growth from last January were Gasoline Stations (+39.1%), Food Services and Drinking Places (+28.8%), Clothing Stores (+27.2%), Motor Vehicles and Parts (+12.8%), Miscellaneous Stores (+12.2%), General Merchandise Stores (+11.4%), and Building Materials Stores (+11.0%).
Retail sectors seem to continue to benefit from pent up customer demand and increasing leisure travel despite rising inflation.
(Sources: U.S. Census Bureau; Advance Monthly Retail Trade Reports, not adjusted)
Tennessee State and Local Sales Tax Collections
The Knoxville MSA region collected $125.44 million in state sales taxes in January (up 13.9% from December and up 10.8% from last January) and Knox County collected $82.93 million in January (up 14.8% from December and up 13.2% from last January.) The state of Tennessee collected $1.248 billion in state sales taxes in January (up 17.5% from December and up 7.8% from last January.)
The Knoxville MSA collected $47.77 million in local sales taxes in January (up 16.1% from December and up 5.7% from last January) and Knox County collected $29.46 million (up 15.7% from December and up 6.7% from last January.)
(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.
February 25, 2022 – Crown Upholstery announced plans to open a school that will offer open workshops in which people can come in with projects and learn the art of upholstery. Classes are one night per week for four weeks. Demand for upholsterers remains high but the number of people skilled and trained for upholstery is limited. Classes begin March 22. You can read more here.
Knox County Business Licenses
New business licenses issued in January 2022 by Knox County are up 16.9% from January 2021 during the pandemic and are down 13.9% from the pre-pandemic January 2019 count.
A total of 422 new business licenses were issued in January 2022 compared to 361 in January 2021 and 490 in January 2019. The top industry sectors for which business licenses were issued in January 2022 were services, construction, non-classified establishments, and retail.
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 185,605 passengers in December (down 6.7% from November’s passenger traffic of 198,886 and up 89.6% from COVID-ravaged December 2020 but down 13.3% from pre-COVID December 2019.)
The total freight recorded in December at TYS was 7,835,355 tons (up 11.5% from November and down 5.6% from last December.)
According to the Transportation Security Administration, the average daily number of passengers passing through the nation’s TSA checkpoints in January was 1,483,872 (up 96.4% from the January 2021 daily passenger average of 755,524 but still down 22.5% from the pre-COVID January 2019 average of 1,914,758.) You can view the daily TSA checkpoint travel numbers here.
According to the International Air Transport Association (IATA), “Comparing forward bookings made between November 2021 and early February 2022 in these domestic markets with the same period in 2019, we can see that ticket sales rebounded in the U.S., China and India in early February after previous weakness caused by Omicron disruptions to demand, capacity and labour force. Since travelers tend to book closer to the travel date amid pandemic uncertainty, the increase in bookings bodes well for actual traffic volumes in February and March. The U.S. has been the strongest performer with ticket sales for all future travel reaching 98% of 2019 levels in early February.” You can read more here.
(Sources: Metropolitan Knoxville Airport Authority; U.S. Transportation Security Administration; International Air Transport Association)