Tennessee Business and Economic Outlook, Fall 2009

Tennessee should see the rate of job decline diminish in the quarters ahead. While job gains will finally take hold in the second quarter of 2010, year-over-year losses will be recorded in the first, second and third quarters of the year. Nonfarm jobs are expected to fall 4.1 percent this year, with a 0.8 percent setback expected for 2010. The weak labor market will push the state unemployment rate to 10.8 percent in the first quarter of 2010. Personal income is expected to grow only 1.2 percent this year, improving to 2.0 percent growth next year. Unfortunately, the strongest-growing component of personal income has been, and will continue to be, transfer payments. Taxable sales will register positive quarterly and year over-year growth by the first quarter of 2010. Despite this turnaround, taxable sales are expected to fall 1.3 percent for the current fiscal year.