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What are trends for Upper Cumberland unemployment?

Monday, Aug 1, 2011

Some might say trying to predict unemployment rates in the Upper Cumberland is like trying to herd cats on Interstate 40.

And they might not be far off, though some trends do seem to emerge.

Like all of America, the Upper Cumberland has been impacted by the great recession which appears to have gotten into high gear at the very end of 2008. Though a recovery has been in progress for quite some time, unemployment continues to remain high and job growth low.

Just last week, the federal government released a dismal report which showed national unemployment going from 9.1 percent to 9.2 percent in June. Additionally, there were only 18,000 private sector jobs created nationally in the month. Economists had anticipated close to 100,000 new jobs being created, so the numbers were bleak.

What does that mean in the Upper Cumberland?

“It has been rather stagnant for some time,” said Henry Bowman of the Upper Cumberland Development District. “I have never seen it so stagnant for so long.”

It may be hard to predict what the future holds for this area. In the 15-county region covered by the Cumberland Business Journal, unemployment in May, which is the last reporting period available, showed the rate at 10 percent. That was unchanged from April of this year. In Tennessee, the rate for May was 9.7 percent, up from 9.6 the previous month.

Yet when looking at historical numbers since the onset of the recession, the picture for the Upper Cumberland may not be as bleak, though such predictions are precarious, at best.

It is a fact that Upper Cumberland unemployment was once much higher than the state and national averages.

Take February 2009 when the recession was in full swing. In the Upper Cumberland, the rate of unemployment was 13 percent while nationally, the rate stood at 9.6 percent on its march to a high of just over 10 percent later in the year. In Tennessee, the rate that month was 9.6 percent, a major jump from 7.9 percent in November 2008 but still well less than the percentage in this region. This could indicate the Upper Cumberland was impacted before most of the country, a trend some have said does not usually happen in this region.

From that point on, the rates in Tennessee and nationally would continue to climb, though the national trends showed spikes while the state remained more steady. The national rate would reach its peak at 10.1 percent in October 2009 and would remain in double figures for the next two months.

In Tennessee, the rate in October 2009 was 10.8 percent. The previous three months the rate was 10.9 percent, so the downward trend had begun. Looking at strictly raw numbers, a deduction can be made that Tennessee was ahead of the national curve when it came to the impacts of the recession on unemployment.

For the Upper Cumberland, the peak was well before the state or national rates hit high marks. From January 2009 through August 2009, the rate was either 12 or 13 percent each month.

But if you look at the entire unemployment picture from just before the recession began through today, there are some conclusions which can be drawn.

First, the Upper Cumberland, while higher than the national average in the actual rate, tends to mirror the peaks and valleys of the nation. For instance, in early 2010, the national rate rose one month and stayed above the previous months three straight times. In the Upper Cumberland, the rate also rose and stayed at that level before dropping at the same time as the national rate.

Comparing that to the Tennessee trend, there really is no comparison. Tennessee’s state unemployment rate has remained on almost a steady line, going up slightly at the start of the recession, trending downward during 2010 and then going up just slightly in the beginning of 2011.

With the most recent figures released by the federal government showing the national rate going up from 9.1 to 9.2 percent and the state rate going up from 9.6 to 9.7 percent, it appears the Upper Cumberland region could see an increase in unemployment when the June figures are released next week. However, because of the vast population differences between the state, country and Upper Cumberland, large impacts can happen if regional employers either hire people or release people from their jobs.

All indications are the rate could tick up slightly in June for the Upper Cumberland though that won’t be known until the hard numbers are released.

Another conclusion which can be drawn from the unemployment figures is the fact the Upper Cumberland, though still higher than the state and national averages, has at least closed the gap when it comes to percentages.

The region is less than 1 percent higher than the state and national averages in the past couple of months as compared to being 3 percent higher or more for a long stretch through the recession. It may be the case, as well, the Upper Cumberland could always be higher when it comes to the unemployment rate.

In November 2008, just as the recession was about to hit, the Upper Cumberland rate was 9 percent. In May of this year, the rate was 10 percent. That’s only an increase of 1 percent during that entire period. However, also during that period, the rate was at 12 and 13 percent consistently. By September 2010, the rate had fallen to 9 percent, the first time since November 2008, before spiking back up by November 2010.

According to James C. Perry of the Tennessee Workforce Development, the trends in recent months have actually shown more available jobs in Cumberland County. He said job postings have increased by 60 percent and are mainly in the industrial and commercial construction industries.

“However, the hiring trend in these industries has posed a problem in the hiring process,” says Perry. “Employers are seeking workers with consistent, current and uninterrupted work histories.”

He said an “emphasis on education and training” has been another criteria for employment by local business both in the private and public sectors. He said many of the applicants applying for jobs have been receiving unemployment benefits for long periods of time, have felony convictions or, if they have worked, their work history shows a tremendous amount of “job flipping.”

Finally, Perry said the lack of education “remains another key obstacle in obtaining viable employment by many of our job seeking clients.”

The good news may be the Upper Cumberland region has closed the gap, even while adding people to the workforce. In November 2008, there were 159,410 people listed as the civilian labor force in this region. At that time, 14,870 were listed as out of work. In May 2011, the workforce was reported at 162,340, with 17,020 out of work. That’s a 2 percent increase in the available workforce and a 1 percent increase in the rate of unemployment (9 percent to 10 percent).

One obvious conclusion which can be drawn is the Upper Cumberland more mirrors the nation than the rest of Tennessee. Why this is the case could be anyone’s guess. Does it mean the Upper Cumberland is more closely aligned with the national cycle than the state trends? Could it be because so many automotive-related companies are located in this area, directly linking us to the national economy? Could Cookeville and Putnam County, the most populous city and county in the region, be part of that influence with so many national restaurants, retail stores and lodging facilities?

The answers may never be known, however, they are a central point of intrigue for many and are something to ponder when trying to predict any future trends.
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