As mentioned above, initial claims for unemployment insurance fell sharply in December. This improvement was reinforced by a fall in continued weeks claimed for Tennessee unemployment insurance from 199,000 to 177,800. Despite these improvements, however, the Tennessee unemployment rate inched forward from 5.0 percent to 5.1 percent, but remains below the national unemployment rate of 5.6 percent, which was unchanged from the previous month. This decline is unsettling since manufacturing accounts for more than one in five nonagricultural jobs in Tennessee. The Tennessee economy closed out 1995 on a high note and entered 1996 poised for sustained expansion.
Economic conditions appear ripe for continued growth into the summer months.
The only weak spot in the state economy is the manufacturing sector. Even a slight rebound in the manufacturing sector will ensure the economy's success. There were some other, very positive signals in the Chattanooga economy in December, including the Chattanooga labor market, which showed signs of renewed strength. Three components were responsible for pushing down the Chattanooga economic index in December, all of which reversed positive strides made in the previous month. On the up side, improvements in four index components helped to temper the fall.