KNOXVILLE, Tenn. — Tennessee’s economy, now in its fifth year of sustained expansion, will continue growing into 1998, University of Tennessee economists have told Gov. Don Sundquist.
In its quarterly report to the governor, UT-Knoxville’s Center for Business and Economic Research said the 1996 buying power for Tennesseans will increase 3.7 percent.
“What measures the purchasing power of the typical household or the person on the street is their income adjusted for inflation,” UT economist Matt Murray said.
“We’re seeing some healthy gains in overall income. We are not, however, seeing very strong gains in the average wage for the average worker in Tennessee.”
The UT report also said:
* Tennessee taxable sales will increase an average 5.1 percent for 1996 and 1997.
* The Tennessee unemployment rate for the next 12 months will average 5.2 percent, virtually full employment.
* Despite a loss of 7,000 jobs in the nondurable and food sectors of the Tennessee economy, the state will have a net increase of 73,000 jobs in 1996.
“Tennessee’s job picture has softened somewhat since last year, when the state economy created over 80,000 jobs,” Murray said.
“It’s often confusing to simply cite growth rates because that masks what’s happening in the economy. We’re looking at 76,900 new jobs in Tennessee in 1996.”
With the state expected to lose 3,900 net jobs in 1996, “that’s a net increase of 73,000 jobs overall,” Murray said.
“Economic growth (in Tennessee) will remain sufficiently vigorous to support job (growth of 3.1 percent) and income gains for most Tennesseans in 1996…slowing to 2.8 percent in 1997.”
The national economy is expected to grow 2.1 percent this year, and the growth in consumer expenditures is forecast at 2.1 percent, Murray said. Consumer spending represents two-thirds of total spending in the national economy.
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Contact: Dr. Matt Murray (423-974-5441)