Labor Market Information
Data note – due to the federal government shutdown, October 2025 data has been canceled.
The Knoxville MSA’s unemployment rate in December was 2.9% (down from 3.4% in November and down from 3.2% in December 2024.) Knox County’s unemployment rate in December was 2.7% (down from 3.2% in November and down from 3.0% in December 2024.) Tennessee’s unemployment rate was 3.4% in December (down from 3.7% in November and down from 3.5% in last December.) The U.S. unemployment rate was 4.1% in December (down from 4.3% in November and up from 3.8% in last December.)
Knox County’s labor force slightly decreased 0.4% from 263,191 in November to 262,151 in December. The Knoxville MSA’s labor force slightly decreased 0.4% from 468,840 in November to 467,121 in December. Tennessee’s labor force slightly increased 0.1% from 3,523,576 in November to 3,527,850 in December. The national labor force slightly decreased 0.4% from 171,467,000 in November to 170,723,000 in December.
Below is the 13-month unemployment rates trending comparison for the four largest MSA’s in Tennessee –
Job Market
For the month of December, there were 8,332 unique new job postings in the Knoxville MSA (up 6.7% from November and down 3.8% from last December.) There were 5,177 unique new job postings in Knox County (up 7.4% from November and down 5.7% from this time last year.)
The Top 10 industries (by number of job postings) in the Knoxville MSA in December were –
The Top 10 occupations (by number of job postings) in the Knoxville MSA in December were –
You can view the 13-month job postings trend for Knox County and the Knoxville MSA below.
(Source: Lightcast – formerly Emsi Burning Glass)
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 January report shows a net gain of 22,000 jobs in private-sector employment (down from the 41,000 net jobs gain in December). Industry sectors showing positive job growth in January include Education and Health Services (+74,000), Financial Activities (+14,000), Construction (+9,000), Leisure and Hospitality (+4,000), and Trade/Transportation/Utilities (+4,000).
The industry sectors that showed job losses in January were Professional and Business Services (-57,000), Other Services (-13,000), Manufacturing (-8,000), and Information (-5,000). The Natural Resources and Mining sector was unchanged.
By establishment size, mid-sized businesses (with 50-249 employees) gained 37,000 jobs, “Very Small” businesses (with 1-19 employees) gained 30,000 jobs, and mid-sized businesses (with 250-499 employees) gained 4,000 jobs. “Other Small” businesses (with 20-49 employees) lost 30,000 jobs and large businesses (with 500+ employees) lost 18,000 jobs.
(Source: ADP)
Locating the Digital Workers
The Economic Innovation Group (EIG) recently released a report showing the five-year (2019 to 2023) growth of digital workers in the nation’s metropolitan statistical areas (MSAs). EIG used the Bureau of Economic Analysis (BEA) definition of the digital economy, which includes four major types of goods and services:
- Infrastructure, or the basic physical materials and organizational arrangements that support the existence and use of computer networks and the digital economy, primarily information and communications technology (ICT) goods and services.
- E-commerce, or the remote sale of goods and services over computer networks.
- Priced digital services, or services related to computing and communication that are performed for a fee charged to the consumer.
- Federal non-defense digital services represents the annual budget for federal non-defense government agencies whose services are directly related to supporting the digital economy.
The digital economy, as defined by the BEA, accounts for 10 percent of the nation’s Gross Domestic Product (GDP) and is almost certain to grow as a share of the overall U.S. economy.
From 2019 to 2023, the number of digital workers grew by 12% (six percentage points faster than the national employment growth rate.) This means that six percent of all workers are now employed in the digital economy. Unsurprisingly, half of all digital workers live in just ten MSAs, with three MSAs (New York City, San Francisco, and Los Angeles) accounting for a fifth of the total digital workforce.
The total number of digital employees in the Knoxville MSA was 15,775 (or 3.47% of total MSA employees) as of 2023. The digital employment growth rate for the Knoxville MSA from 2019 to 2023 was 0.33%. The Knoxville MSA five-year digital worker growth rate was the second highest among peer MSAs. Durham, NC grew 4.49%, Greenville, SC grew 0.22%, Nashville grew 0.16%, Chattanooga grew 0.10%, Raleigh grew 0.08%, and Memphis grew 0.03%. Interestingly, Huntsville contracted 0.20%. Asheville was unchanged. You can read more here.
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 January, there were 12,944,000 people employed by U.S. small businesses with one to nine employees, up 17,500 from December. Jobs increased in nine of the twelve industry sectors tracked by the Index including Leisure and Hospitality (+9,800), Education and Health Services (+2,500), Retail Trade (+2,400), Construction (+1,700), Finance and Real Estate (+600), Agriculture/Natural Resources/Mining (+500), Wholesale Trade (+400), Transportation and Warehousing (+200), and Utilities (+200). The industry sectors in which jobs decreased were Information (-500) and Manufacturing (-100). The Professional and Business Services sector was unchanged.
Below is the 13-month total employment trend for U.S. small businesses with one to nine employees –
Please note that all monthly small business employment estimates are subject to revision.
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 6.5 million jobs to fill and only 5.3 million hires in December, leaving 1.2 million jobs unfilled.
In December, the largest increases in U.S. job openings were in accommodation and food services (+85,000), other services (+56,000), manufacturing (+34,000), private educational services (+16,000), wholesale trade (+13,000), information (+12,000), transportation/warehousing/utilities (+9,000), and construction (+8,000).
The largest decreases in job openings were in professional and business services (-257,000), retail trade (-195,000), financial activities (-98,000), health care and social assistance (-92,000), and arts/entertainment/recreation (-18,000).
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)
Data note: due to the federal government shutdown, October data has been canceled.
The national inflation rate from December 2024 to December 2025 is 2.7%. This is unchanged from the November 2024 to November 2025 period. Last year, the national inflation rate was 2.9% from December 2023 to December 2024.
The December CPI report marks the 42nd 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 10.8%, electricity costs are up 6.7%, auto repair services are up 5.4%, eating out prices are up 4.1%, housing prices are up 3.2%, rent is up 2.9%, auto insurance is up 2.8%, groceries are up 2.4%, used car prices are up 1.6%, apparel is up 0.6%, and new vehicle prices are up 0.3%. From a year ago, airline fares are down 3.4% and gasoline prices are down 3.4%.
The Federal Reserve decided to maintain the target range of the federal funds rate at 3 ½ to 3 ¾ percent at its Federal Open Market Committee (FOMC) policy-setting meeting January 27-28. The Fed stated that “economic activity has been expanding at a solid pace. Job gains have remained low, and the unemployment rate has shown some signs of stabilization. Inflation remains somewhat elevated.” The committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer 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 2.4% for the December 2024 to December 2025 period. This is unchanged from the November 2024 to November 2025 period. Last year, the rate was 3.0% from December 2023 to December 2024.
(Source: U.S. Bureau of Labor Statistics; Consumer Price Index; Not Seasonally Adjusted)
Housing Market
December home sales in East Tennessee increased 16% from November at a seasonally adjusted annual rate (SAAR) of 21,323, an increase of 15% over 2024.
December home sales in Knox County increased 18.3% month over month, up 13.5% from 2024, at a seasonally adjusted annual rate (SAAR) of 7,911.
The median home sales price across the East Tennessee region was $370,000 in December, no change from 2024. Knox County’s median home sale price rose to $385,000, down 1.8% from 2024.
Half of the homes sold across the East Tennessee region went under contract in 38 days or less, up from 30 days last year.
Active inventory in the East Tennessee region was up 18.7% 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, decreased sharply to 3.9 months due to unseasonably robust sales activity in December.
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
Data note – due to the federal government shutdown, December 2025 data is delayed.
The total advance monthly retail sales estimate for November 2025 was $737.035 billion (down 1.1% from October and up 0.1% from last November.)
The retail sectors that showed sales growth from last November were Clothing Stores (+4.1%), Health and Personal Care Stores (+3.9%), Food Services and Drinking Places (+3.0%), Miscellaneous Stores (+1.5%), Gasoline Stations (+1.4%), Food and Beverage Stores (+1.0%), General Merchandise Stores (+0.9%), and Non-store Retailers (+0.7%).
Retail sectors that showed a decline in sales from last November were Building Materials (-7.0%), Furniture and Home Furnishings Stores (-3.9%), Motor Vehicles and Parts Sales (-3.8%), Sporting Goods/Books/Hobby/Music Stores (-1.1%), and Electronics and Appliance Stores (-0.4%).
(Source: U.S. Census Bureau; Advance Monthly Retail Trade Reports; Not Adjusted)
Tennessee State and Local Sales Tax Collections
The Knoxville MSA region collected $127.669 million in state sales taxes in December (down 6.2% from November and up 0.1% from last December) and Knox County collected $83.583 million in December (down 3.8% from November and down 0.1% from last December.) The state of Tennessee collected $1.221 billion in state sales taxes in December (down 5.1% from November and up 2.4% from last December.)
The Knoxville MSA collected $50.048 million in local sales taxes in December (down 2.5% from November and up 4.7% from last December) and Knox County collected $30.364 million in December (down 2.0% from November and up 3.4% from last December.)
(Source: Tennessee Department of Revenue)
Knoxville Moves Up to Rank #33 on Milken Institute’s Best-Performing Cities Index 2026
The Milken Institute recently released its annual Best-Performing Cities (BPC) Index, which measures the economic vitality of cities and their attractiveness to residents and businesses. The BPC index compares 403 metropolitan areas by measuring 13 metrics across three key categories – labor market conditions, high-tech impact, and access to economic opportunities. Labor market conditions include short- and medium-term indicators of trends in employment and wages. High-tech impact captures the presence and growth of high-tech industries. Access to economic opportunities reflects the cities’ ability to remain attractive to residents by providing access to services and building inclusive and sustainable social structures.
Knoxville ranked #33, improving 36 spots from last year’s index ranking. Some of Knoxville’s metric rankings include: #27 for five-year job growth (2019-2024), #33 for five-year wage growth (2019-2024), #47 for five-year high-tech GDP growth (2019-2024), and #115 for high-tech concentration. Knoxville’s worst metric ranking was #156 for broadband access.
The top five cities in the nation were Fayetteville (AR), Huntsville (AL), Charleston (SC), Boise (ID), and Raleigh (NC). The overall rankings for Knoxville’s peer cities were #2 Huntsville, #5 Raleigh, #13 Durham-Chapel Hill, #15 Greenville (SC), #19 Nashville, #51 Lexington (KY), #62 Chattanooga, #111 Asheville, and #205 Memphis. You can read the full report here.
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.
January 16, 2026 – LIS Technologies (LIST), the sole U.S.-origin and patented laser enrichment technology developer, announced plans to create 203 new jobs and invest $1.38 billion in an Oak Ridge uranium enrichment facility to be located on the former Duct Island. The island has been rebranded as “LIST Island.” The facility will become the first U.S.-origin commercial laser uranium enrichment plant in the world, supporting U.S. utilities, next-generation reactor developers, and national defense requirements while helping to reestablish a resilient domestic nuclear fuel supply chain. You can read more here and here.
Knox County Business Licenses
New business licenses issued in December 2025 by Knox County are down 39.5% from November and are up 36.0% from December 2024.
A total of 121 new business licenses were issued in December 2025 compared to 200 in November and 89 in December 2024. The top industry sectors for which business licenses were issued in December 2025 were services, retail, construction, and finance/insurance/real estate.
Below is a chart showing the 13-month trend of business licenses issued by Knox County.
(Source: Knox County Clerk)
Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) Funding
The Small Business Innovation Research (SBIR) program is a federal funding program that awards grants or contracts to small businesses to conduct research and development (R&D). Recipient projects must meet specific R&D needs of the federal government and must have commercialization potential. The program is coordinated by the Small Business Administration (SBA).
The Small Business Technology Transfer (STTR) program is very similar to the SBIR program except that the STTR requires the small business to partner with a research institution which must be awarded a minimum of 30% of the total grant funds.
SBIR/STTR grants are awarded annually to nearly 5,000 startups and small businesses throughout the nation. In FY 2024-2025, there were 53 SBIR awards in the state of Tennessee (of which 20 or 38% of the awards were in the Knoxville area). There were also nine STTR grant recipients in Tennessee (three of which were in the Knoxville area).
Below is a table showing the five-year history of SBIR/STTR awards in Tennessee and the Knoxville MSA–
The SBIR grant recipients for FY 2024-2025 in the Knoxville area were Analysis and Measurement Services Corp., CE-RI-SS Materials LLC (1), CE-RI-SS Materials LLC (2), Cryomagnetics Inc., Daxor Corp. (1), Daxor Corp. (2), Eden Concepts, Endeavor Composites (1), Endeavor Composites (2), Kinard Technologies LLC, Nucleon Power Inc., Perseus Materials Inc. (1), Perseus Materials Inc. (2), Phelps 2020 Inc., SkyNano LLC (1), SkyNano LLC (2), Veracity Nuclear LLC (1), Veracity Nuclear LLC (2), Veracity Nuclear LLC (3), and Winter Innovations Inc.
The Knoxville area STTR grant recipients for FY 2024-2025 were Eonix LLC (1), Eonix LLC (2), and SkyNano LLC.
The Knoxville MSA received a total of 67 SBIR awards over the past five years and ranks fourth among its ten peer MSAs. Huntsville ranks #1 with 387 SBIR awards, followed by Durham-Chapel Hill with 263 and Raleigh-Cary with 176.
The Knoxville MSA received a total of 13 STTR awards over the past five years and ranks fifth among the peer MSAs. Similar to the SBIR award totals, the top three peer MSAs for receiving STTR awards over the past five years are Huntsville (with 111), Durham-Chapel Hill (with 55), and Raleigh-Cary (with 53).
Below is a chart showing the five-year SBIR and STTR award totals for all the peer MSAs.
In addition to the federal SBIR/STTR grants, Launch Tennessee (LaunchTN) has a grant-matching program for SBIR/STTR recipient businesses to further help entrepreneurs advance the commercialization of technology across the state. Requirements for receiving state matching funds are that the business be based in Tennessee for at least the next 24 months and commit to semi-annual reporting to LaunchTN. You can read more here.
(Source: SBIR.gov)
McGhee Tyson Airport (TYS) Passenger and Freight Trends
The Metropolitan Knoxville Airport Authority recorded 290,509 passengers in December (down 1.0% from December 2024.) Year-to-date passenger traffic through December is 3,630,410 (up 8.7% from year-to-date passenger traffic through December 2024.) 2025 was a record year for TYS passenger traffic.
The total freight recorded in December at TYS was 4,459,908 pounds (up 1.1% from December 2024.)
According to the Transportation Security Administration, the average daily number of passengers passing through the nation’s TSA checkpoints in December was 2,497,461 (slightly higher, though statistically unchanged from the December 2024 daily passenger average of 2,496,288 and up 10.0% from the pre-COVID December 2019 average of 2,270,160.) You can view the daily TSA checkpoint travel numbers here.
According to the International Air Transport Association (IATA) , “In the US, domestic demand fell by 2.0% YoY in December, marking a second consecutive month of decline following a brief expansion in October. Possible contributing factors include operational disruptions arising from extreme weather, and economic uncertainty. Capacity continued to edge higher, pushing the PLF (Passenger Load Factor) down to 82.5%.” You can read more here.
(Sources: Metropolitan Knoxville Airport Authority; U.S. Transportation Security Administration; International Air Transport Association)
