KNOXVILLE — Tennessee’s 3.5 percent unemployment rate for February was a record low. That means less than 100,000 of the state’s 2.8 million workers were unemployed.
But a University of Tennessee economist said it might be a problem for employers.
Dr. Bill Fox said a tight labor market makes it hard for companies to find enough qualified workers.
“We didn-t expect unemployment rate to get this low; 3.5 is a very low rate,” Fox said. “I think it’s very positive news I in the sense that everybody who wants a job and has the skills can have a job in this environment.
“The bad news side of is that if you-re an employer looking for new employees, it’s more difficult to find them is so certainly economic growth will be slower.”
Fox said another concern is inflation if the unemployment rate gets too low.
“The other concern is that if the unemployment rate gets too low inflation becomes a more serious problem because employers would compete with each other for employees and bid the wages up.
“So far that hasn’t happened, and that is a bit of a surprise for economists.”