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Tennessee unemployment rate drops to lowest in state's history, 3.2%

The amount workers made on average also increased compared to the month before, reaching over $1,000 per week.

KNOXVILLE, Tenn. — Tennessee reached a new milestone in March after the state's unemployment rate fell to the lowest it has ever been in the state's history.

The Tennessee Department of Labor and Workforce Development said March's unemployment rate was at 3.2%, a dramatic change from the record-high unemployment rates that it saw during the height of the COVID-19 pandemic.

The all-time high unemployment rate in Tennessee was set in April 2020 at 15.9%.

Workers are generally working more hours too, for an average of 44.2 hours per week in Tennessee. That is an increase of nearly an hour compared to the month before. At the same time, they are bringing home some extra money, increasing to $1,000.69 per week on average.

The national average is around 41.6 hours and $1,026.69 per week. Nationally, workers can expect about $25 per hour, but in Tennessee, they could expect about $22 per hour for their labor.

Despite the low unemployment rate, some small business owners still have not found employees. The state's labor force participation rate also increased to 60.6% in March 2022, a small increase compared to last year.

At the same time, data from the Federal Reserve shows a spike in consumer credit card debt nationwide. In 2022, credit card debt jumped 20.7% to more than $1.1 trillion nationwide.

When you lump all consumer debt together, it increased by $42 billion over the year to a total of almost $4.5 trillion across the U.S. That's an annual increase of 11.3%.

"You could travel for a moment but you have to come back to reality at some point and keep the family and keep the mortgage paid," said Jill Thompson, the Executive director of The Greater Knoxville Hospitality Association.

She said that business is booming, tourism is growing, and there are many job openings that have yet to be filled in her industry.

"Employees, unfortunately, are not coming back at the rate that businesses are," Thompson said. 

El Chico, a restaurant on Cedar Lane, has been operating for more than 30 years and said they never faced a problem like this. 

"The last two years, the first time in 34 years that we're seeing this kind of struggle in the restaurant industry," Owner Girish Desai said.

Desai said the drastic dip in his staff didn't happen in 2020. It started well into the pandemic. Data from the Department of Labor show that hasn't really changed in 2022. 

"Most people that I'm hearing from, it's like online work or they're just not working. They've stepped back and said, 'Hey I just don't want to go back yet,'" Desai said.

Working with skeleton crews, business owners are getting creative. Many are adding incentives, bonuses and flexible hours to compete in a new labor market. 

"We've taken out some of the tables out of the restaurant so we're not struggling as bad. We're moving people around to work and if I have to jump behind the bar and I'm still able to watch the restaurant from that end, I can do that," Desai said. 

Both Desai and Thompson said when people are ready, they'll be welcomed with open arms into the hospitality industry. 

"We have the jobs we just need the employees," Thompson said. 

The number of jobs in information across the state grew to almost 50,000, according to the department. Management jobs also grew slightly to around 54,200.

However, the number of jobs in education grew the most, increasing to 62,300 in March.

The national unemployment rate also decreased in March, dropping to 3.6% The country's labor force also grew, while the labor force participation rate stayed around the same at 62.4%

Tennessee offers anyone looking for work a centralized application center where they can look through openings in different areas across the state. It is called Jobs4TN and can be accessed online.

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