KNOXVILLE — Tennessee’s economy is on the rebound and the job market over the next two years should be similar to the boom of the 1990s, a University of Tennessee report says.
Most state economic indicators point to improvement over the next two years, with the most positive change in the labor market, Dr. Matthew Murray, UT economics professor and associate director of the Center for Business and Economic Research, said.
“The state should see a rebound in growth in the third and fourth quarters of 2004 relative to the brief slowdown that took place in the second quarter of the year,” the report says.
“The most significant change expected in 2005 and 2006 is an improvement in labor market conditions. The outlook calls for improved labor market conditions that will approach the economy’s performance of the late 1990s,” the outlook says.
Murray, author of the Tennessee Business and Economic Forecast, said service sector jobs will have the most growth. There will be little expansion in manufacturing and government jobs.
Construction will have the least growth, due in part to the high levels of past years, Murray said.
Tennessee’s unemployment rate at the end of 2004 is forecast to be 4.7 percent, compared to 5.5 percent for the nation. It will drop to 4.4 percent in 2005, while the U.S. average will be unchanged, the report says.
Tennesseans’ personal income, adjusted for inflation, will grow 4.1 percent this year. The national personal income rate will remain unchanged.
State taxable sales should grow 5.7 percent in 2004, 2 percent higher than last year. Manufacturing and establishments that serve food and drink will lead all taxable sales sectors in 2005, the outlook says.