Economic Conditions Outlook

November 2025

Welcome to the November 2025 issue of ECO, financed by First Horizon Bank, the Knoxville Chamber’s monthly economic outlook analysis.

Each month, we provide a varied list of economic indicators with subsequent insight into how the data and information may impact the region. A major component of this work is our quarterly survey of businesses in the manufacturing, retail, and service sectors, which we leverage to gauge current economic conditions and gain insights into the economic outlook for the next six months. We also include traditional labor market, housing, sales tax, and airport information, as well as impromptu information as it becomes available.

We hope that ECO – financed by First Horizon Bank, will help our regional business community make more informed decisions as they run their businesses.

Survey Note: Beginning January 2024 and going forward, the Economic Conditions Outlook (ECO) Survey is being conducted on a quarterly basis instead of monthly.

See Previous Issues

Jump to Analysis:

Airport Freight and Passenger Trends	National Employment Report
Consumer Price Index/Inflation Rates	National Retail Sales
Housing Market	Recent Expansion Announcements
Job Market	State and Local Sales Tax
Knox County Business Licenses	Worker Shortage Update

Economic Survey Results by Industry

Based on the response to the Quarter 4 (October 2025) survey, the evaluation of the level of general business activity has “worsened” and company outlooks have remained “the same” from the previous quarter. (In the last quarter, the evaluation of the level of general business activity and company outlooks had mostly “improved.”)

The Quarter 4 current indicator responses show “increases” in prices paid for raw materials, prices received for finished goods, wages and benefits, number of employees, and capital expenditures. Production, volume of new orders, volume of shipments, and finished goods inventories show “decreases.” “No changes” are reported for capacity utilization, growth rate of orders, unfilled orders, delivery time, and average employee workweek. (In the last quarter, responses showed mostly increases in production, capacity utilization, volume of new orders, growth rate of orders, unfilled orders, volume of shipments, prices paid for raw materials, prices received for finished goods, wages and benefits, the number of employees, and capital expenditures. “No changes” were mostly reported for the average employee workweek. Delivery time was evenly split between “increase” and “no change.” Finished goods inventories was evenly split between “decrease” and “no change.”)

The six-month outlook in Quarter 4 anticipates “increases” in production, capacity utilization, volume of new orders, growth rate of orders, volume of shipments, finished goods inventories, prices paid for raw materials, prices received for finished goods, wages and benefits, number of employees, average employee workweek, and capital expenditures. “No changes” are expected for unfilled orders and delivery time. (The six-month outlook in the last quarter expected mostly “increases” in production, capacity utilization, volume of new orders, growth rate of orders, volume of shipments, prices paid for raw materials, prices received for finished goods, wages and benefits, the number of employees, and capital expenditures. “No changes” were mostly expected for unfilled orders, finished goods inventories, and average employee workweek. Delivery time was evenly split between “increase” and “no change.”)

Note: There were no retail responses for the Quarter 4 (October 2025) survey. The analysis below is from Quarter 3 (July 2025).

Knoxville area retailers indicated in the Quarter 3 (July 2025) survey that their evaluation of the level of general business activity and company outlooks are evenly split between “Improved” and “worsened.” (In the last quarter, retailers responded that their evaluation of the level of general business activity had “worsened” from the previous quarter and company outlooks had stayed “the same.”)

The Quarter 3 current indicator responses show “increases” in wages and benefits and input prices. “No changes” are reported in internet sales and inventories. All other indicators are evenly split between “increase” and “no change.” (In the last quarter, retail responses showed “increases” in net sales revenue, input prices, selling prices, capital expenditures, and inventories. The numbers of both full-time and part-time employees had “decreased.” “No changes” were reported for internet sales, average employee workweek, and wages and benefits.)

The six-month retail outlook in Quarter 3 projects “no changes” in internet sales, the numbers of full-time and part-time employees, and average employee workweek. Net sales revenue is evenly split between “increase” and “decrease.” Selling prices, capital expenditures, and inventories are evenly split between “increase” and “no change.” “Increases” are expected in wages and benefits and input prices. (The six-month outlook in the last quarter anticipated “increases” in net sales revenue, input prices, selling prices, and capital expenditures. “No changes” were expected in internet sales, the numbers of full-time and part-time employees, average employee workweek, and wages and benefits. Inventories were expected to “decrease.”)

Knoxville area service sector businesses report in the Quarter 4 (October 2025) survey that their evaluation of the level of general business activity and company outlooks are “the same” from the last quarter. (This sentiment is unchanged from the last quarter.)

The Quarter 4 current indicator responses show “no changes” in revenue, the number of part-time employees, average employee workweek, wages and benefits, input prices, and selling prices. The number of full-time employees and capital expenditures are evenly split between “increase” and “no change.” (In the last quarter, responses showed mostly “increases” in input prices and capital expenditures. The number of full-time employees, wages and benefits, and selling prices were evenly split between “increase” and “no change.” Revenue, the number of part-time employees, and average employee workweek were mostly reported as unchanged.)

The six-month outlook in Quarter 4 projects “no changes” in the number of part-time employees, average employee workweek, input prices, and selling prices. Capital expenditures are expected to “increase.” Future revenue, number of full-time employees, and wages and benefits are evenly split between “increase” and “no change.” (The six-month outlook in the last quarter anticipated mostly “increases” in revenue, wages and benefits, input prices, and capital expenditures. “No changes” were mostly expected in the numbers of full-time and part-time employees, and average employee workweek. Selling prices were evenly split between “increase” and “no change.”)

In addition to the regular quarterly survey questions, respondents were asked if the tariffs were directly or indirectly impacting their businesses and if so, in what ways. The majority (67%) of respondents said the tariffs were impacting their business. The cost and availability of raw materials, shipping costs, and the uncertainty of near- and long-term prices were all cited as negative business impacts.

Labor Market Information

Data note – due to the federal government shutdown, October 2025 data has been delayed.

The Knoxville MSA’s unemployment rate in September was 3.2% (unchanged from August and down from 3.3% in September 2024.) Knox County’s unemployment rate in September was 3.1% (unchanged from last month and from September 2024.) Tennessee’s unemployment rate was 3.5% in September (down from 3.6% in August and down from 3.6% in last September.) The U.S. unemployment rate was 4.3% in September (down from 4.5% in August and up from 3.9% in last September.)

The size of the total labor force slightly increased from August to September at the local, state, and national levels. Knox County’s labor force increased 0.6% from 261,868 in August to 263,395 in September. The Knoxville MSA’s labor force increased 0.6% from 465,345 in August to 468,286 in September. Tennessee’s labor force increased 0.5% from 3,506,861 in August to 3,523,808 in September. The national labor force increased 0.1% from 171,035,000 in August to 171,217,000 in September.

Below is the 13-month unemployment rates trending comparison for the four largest MSA’s in Tennessee –

Job Market

For the month of October, there were 9,830 unique active job postings in the Knoxville MSA (down 1.2% from September and down 0.9% from last October.) There were 6,162 unique active job postings in Knox County (down 1.6% from September and down 1.5% from this time last year.)

The Top 10 industries (by number of job postings) in the Knoxville MSA in October were –

The Top 10 occupations (by number of job postings) in the Knoxville MSA in October 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 November report shows a net loss of 32,000 jobs in private-sector employment (down from the 42,000 net jobs gain in October). Industry sectors showing positive job growth in November include Education and Health Services (+33,000), Leisure and Hospitality (+13,000), Natural Resources and Mining (+8,000), and Trade/Transportation/Utilities (+1,000). The industry sectors that showed job losses in November were Professional and Business Services (-26,000), Information (-20,000), Manufacturing (-18,000), Construction (-9,000), Financial Activities (-9,000), and Other Services (-4,000).

By establishment size, large businesses (with 500+ employees) gained 39,000 jobs, mid-sized businesses (with 50-249 employees) gained 31,000 jobs and mid-sized businesses (with 250-499 employees) gained 20,000 jobs. “Other Small” businesses (with 20-49 employees) lost 74,000 jobs and “Very Small” businesses (with 1-19 employees) lost 46,000 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 November, there were 12,847,100 people employed by U.S. small businesses with one to nine employees, down 48,900 from October. Jobs were down in all twelve industry sectors tracked by the Index including Leisure and Hospitality (-8,700), Professional and Business Services (-7,700), Retail Trade (-7,500), Education and Health Services (-4,700), Manufacturing (-4,600), Construction (-4,000), Transportation and Warehousing (-3,700), Wholesale Trade (-2,800), Finance and Real Estate (-2,500), Information (-1,400), Agriculture/Natural Resources/Mining (-900), and Utilities (-300).

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 7.7 million jobs to fill and only 5.1 million hires in October, leaving 2.6 million jobs unfilled.

In October, the largest increases in U.S. job openings were in retail trade (+142,000), wholesale trade (+52,000), health care and social assistance (+49,000), transportation/warehousing/utilities (+44,000), manufacturing (+25,000), and arts/entertainment/recreation (+11,000).

The largest decreases in job openings were in professional and business services (-114,000), financial activities (-90,000), accommodation and food services (-33,000), information (-30,000), construction (-18,000), other services (-8,000), and private educational services (-4,000).

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.

U.S. Manufacturing Activity Continues to Contract

According to the Institute for Supply Management’s (ISM®) latest Purchasing Managers Index (PMI®) Report, U.S. manufacturing activity contracted in November with a score of 48.2 (down from 48.7 in October), the ninth month in a row of contraction. The report attributes the contraction mostly to tariffs. It has become more expensive for many U.S. producers to source materials from abroad that are needed in their manufacturing processes. The fluctuation of tariff levels and a pending U.S. Supreme Court decision regarding the legality of tariffs continues to make the future manufacturing landscape uncertain. You can read more here and here.

Consumer Price Index (CPI – Inflation Rates)

Data note: due to the federal government shutdown, October data has been canceled, and November data has been delayed.

The national inflation rate from September 2024 to September 2025 is 3.0%. This is up from 2.9% in the August 2024 to August 2025 period. Last year, the national inflation rate was 2.4% from September 2023 to September 2024.

The September CPI report marks the thirty-ninth 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 11.7%, auto repair services are up 7.7%, electricity costs are up 5.1%, used car prices are up 5.1%, eating out prices are up 3.7%, housing prices are up 3.6%, rent is up 3.4%, airline fares are up 3.2%, auto insurance is up 3.1%, groceries are up 2.7%, and new vehicle prices are up 0.8%.

From a year ago, gasoline prices are down 0.5% and apparel is down 0.1%.

The Federal Reserve decided to lower the target range of the federal funds rate by a quarter percentage point to 3 ½ to 3 ¾ percent at its Federal Open Market Committee (FOMC) policy-setting meeting December 9-10. The Fed stated that “economic activity has been expanding at a moderate pace. Job gains have slowed this year, and the unemployment rate has edged up through September. More recent indicators are consistent with these developments. Inflation has moved up since earlier in the year and 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 3.0% for the September 2024 to September 2025 period. This is unchanged from the August 2024 to August 2025 period. Last year, the rate was 2.1% from September 2023 to September 2024.

(Source: U.S. Bureau of Labor Statistics; Consumer Price Index; Not Seasonally Adjusted)

Housing Market

October home sales in East Tennessee increased 1.3% from September at a seasonally adjusted annual rate (SAAR) of 19,063, an increase of 8.2% over 2024.

October home sales in Knox County also increased 5.9% month over month but dropped 2% from 2024, at a seasonally adjusted annual rate (SAAR) of 7,046.

The median home sales price across the East Tennessee region was $367,500 in October, down 1.9% from 2024. Knox County’s median home sale price dropped to $382,500, down 4.5% from 2024.

Half of the homes sold across the East Tennessee region went under contract in 31 days or less, up from 21 days last year.

Active inventory in the East Tennessee region was up 19.8% 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, remained at 4.5 months.

While supply is still tight, the rental market in the Knoxville area has continued to improve throughout the year. Monthly rent is down 0.8% from last quarter, and up only 0.4% year-to-date. In the greater Knoxville area, median rent for a 2-bedroom apartment has dropped slightly to $1,142 from a high earlier in the year of $1,206. Median rent for a 1-bedroom apartment is $905.

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)

Knoxville Ranked #1 on moveBuddha’s “Top Move-To Cities for 2026”

A recent report released by moveBuddha, a relocation technology company, forecasts which U.S. cities will receive the most move-ins in 2026. Knoxville ranked #1 with a 1.61 in-to-out ratio. The report notes that “Knoxville hits all three sweet spots that define the top 25: 11 top cities are anchored by a university, 20 are mid-sized cities, and 13 are in the South or Southwest.” Knoxville is followed by #2 Tulsa, OK; #3 Vancouver, WA; #4 Savannah, GA; and #5 Tucson, AZ. You can read more here.

National Retail Sales

Data note – due to the federal government shutdown, October 2025 data is delayed.

The total advance monthly retail sales estimate for September 2025 was $708.950 billion (down 4.9% from August and up 4.0% from last September.)

The retail sectors that showed sales growth from last September were Health and Personal Care Stores (+9.1%), Motor Vehicles and Parts Sales (+5.9%), Non-store Retailers (+5.4%), Furniture and Home Furnishings Stores (+5.0%), Electronics and Appliance Stores (+4.9%), Food Services and Drinking Places (+4.6%), Gasoline Stations (+4.2%), Clothing Stores (+2.6%), Food and Beverage Stores (+1.9%), General Merchandise Stores (+1.2%), and Building Materials (+1.1%).

Retail sectors that showed a decline in sales from last September were Miscellaneous Stores (-2.4%), and Sporting Goods/Books/Hobby/Music 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 $135.347 million in state sales taxes in October (down 1.9% from September and up 6.8% from last October) and Knox County collected $86.367 million in October (down 1.6% from September and up 7.3% from last October.) The state of Tennessee collected $1.248 billion in state sales taxes in October (down 1.3% from September and up 6.8% from last October.)

The Knoxville MSA collected $49.824 million in local sales taxes in October (down 0.6% from September and up 6.6% from last October) and Knox County collected $30.483 million in October (up 1.7% from September and up 7.1% from last October.)

(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.

November 6, 2025 – Aqua Membranes, an Albuquerque, NM-based reverse osmosis (RO) membrane manufacturer, announced plans to build its newest manufacturing facility in the Forks-of-the-River Industrial Park in East Knox County. The global water treatment company will invest more than $6.5 million and create 95 new jobs. The new 200,000-square-foot Knoxville plant will allow the company to expand its manufacturing capacity, support large-scale customer contracts, and accelerate adoption of its RO membrane technology. You can read more here.

Knox County Business Licenses

New business licenses issued in October 2025 by Knox County are down 3.6% from September and are up 9.5% from October 2024.

A total of 264 new business licenses were issued in October 2025 compared to 274 in September and 241 in October 2024. The top industry sectors for which business licenses were issued in October 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)

McGhee Tyson Airport (TYS) Passenger and Freight Trends

The Metropolitan Knoxville Airport Authority recorded 358,247 passengers in October (up 14.3% from September’s passenger traffic of 313,297 and up 3.4% from October 2024.)

The total freight recorded in October at TYS was 5,317,697 pounds (up 9.8% from September and down 7.0% from last October.)

According to the Transportation Security Administration, the average daily number of passengers passing through the nation’s TSA checkpoints in October was 2,561,890 (up 4.0% from the October 2024 daily passenger average of 2,462,324 and up 10.2% from the pre-COVID October 2019 average of 2,324,797.) You can view the daily TSA checkpoint travel numbers here.

According to the International Air Transport Association (IATA), “In the U.S., the world’s largest domestic market, traffic rose modestly by 1.3% YoY in October after contractions in the previous two months. The longest US government shutdown in history, which started on 1 October and lasted for 43 days, did not have a big impact on domestic air travel in October, as the FAA emergency order mandating flight cuts mainly affected airline operations in November. Capacity expanded by 3.1% YoY in October, and the load factor decreased to 82.0%, approximately one and a half percentage points below the same period last year.” You can read more here.

(Sources: Metropolitan Knoxville Airport Authority; U.S. Transportation Security Administration; International Air Transport Association)