Tennessee sees stronger economy this year, CBER says
KNOXVILLE, Tenn. – Despite a sluggish start in the first quarter, the nation and the state of Tennessee can expect strong gains in economic growth in 2015. A drop in unemployment rates and increases in consumer spending signal stronger gains for the rest of the year.
According to the spring 2015 Tennessee Business and Economic Outlook release by the University of Tennessee-Knoxville Center for Business and Economic Research, a cold and snowy winter slowed growth early in 2015. Economic growth is expected to accelerate in the second quarter, thanks to lower energy prices, the report said.
The study predicts the direction of the state and national economies by examining economic and fiscal factors and trends.
The national unemployment rate fell to 5.6 percent in the first quarter, the lowest rate since the second quarter of 2008. Last year, the unemployment rate was 6.2 percent. It is expected to average 5.5 percent this year and fall to 5.2 percent in 2016.
Consumer spending across the nation is expected to rise dramatically this year.
“This can be attributed to an increase in consumer confidence, lower energy prices, and increased purchasing power due to a stronger dollar and low inflation,” said Matt Murray, CBER associate director and author of the report.
Tennessee’s nonfarm job growth outpaced US job growth during the second half of 2014, and Tennessee’s manufacturing sector outpaced the nation’s manufacturing sector in the last two quarters of 2014.
Tennessee’s unemployment rate still rests well above the national rate. The state’s unemployment rate will slowly trend downwards throughout 2015, pushing the average to 6.4 percent. Last year’s average was 6.6 percent.
Other Tennessee findings:
- Taxable sales are projected to increase by at least 3 percent in each of the remaining three quarters of 2015.
- Nominal personal income should increase by 4.4 percent this year and 4.3 percent in 2016.
- Manufacturing employment is projected to grow by 1.7 percent this year, driven by increases in jobs that stem from durable goods manufacturing.
The complete report is available here.