Johnson City, Kingsport-Bristol continue slowly adding jobs, area unemployment rates decline

The Tri-Cities economy added nonfarm jobs at the average rate of 200 a month in August. Compared to August last year there were 1,700 more jobs in the seven-county, two Metropolitian Statistical Area (MSA) region.


The unemployment rate dropped a half a point to 4% as employment increased by 4,976 while the labor force increased by 1,486 people.

The three-month job creation trend was up 1.04% from June, July and August of last year.

The three-month employment trend was up 1.77% from the same period last year. It is increasing at a slightly faster pace than the job creation trend.

Job gains and losses are uneven and are broken down by MSA as is the average weekly private sector wage performance.


There were 600 more nonfarm jobs in August than August last year. Employers are adding jobs at the average rate of 129 a month.

The three-month jobs trend was 1.4% higher than last year. It has been positive every month since April 2014.

The unemployment rate was down a half point to 4.1%, and employment was up 1,954, and the labor force was up 545 people compared to August last year.

The employment trend was up 1.9% from last year. It has been positive every month since April 2015.

Job sectors compared to August last year were

  • Government, up 2.7%.
  • Financial activities, up 2.4%.
  • Trade, transportation and utilities, up 2.2%.
  • Leisure and hospitality, up 2.1%.
  • Professional and business services, up 1.2%.
  • Information; education and health services; and other services were unchanged.
  • Mining, logging, and construction, down 4.3%.
  • Manufacturing, down 5.2%.



Average private sector wages continued increasing in August with a 10.4% gain over August last year. Last month’s average was $671 a week compared to $608 last year. It was the 25th straight month the average has seen a year-over-year increase. When compared to other Tennessee metro areas Johnson City ranks 7th in the state and the third lowest in Northeast Tennessee. Johnson City’s average is $125 a week less than the state average.


August saw a strong gain that balanced three months of weak performance. Compared to last year there were 1,700 more nonfarm jobs. So far, this year, the economy has been adding new jobs at the average rate of 63 a month.

The three-month job trend was up for the third month in August after bottoming at 0% in May.

August’s unemployment rate was down a half-point to 4%. Employment was up 3,022 compared to last year, and the labor force had a 941-person increase.

The employment trend saw its strongest gain since January 2012, up 1.7% from August last year.

Job sectors compared to August last year were

  • Leisure and hospitality, up 11.3%.
  • Other services, up 3.8%.
  • Financial activities, up 2.8%.
  • Professional and business services and government – unchanged.
  • Education and health services down 0.5%.
  • Manufacturing, down 1%.
  • Trade, transportation, and utilities, down 1.2%.
  • Mining, logging, and construction, down 1.4%.
  • Information, down 6.7%.


Average weekly private sector wages were down for the eighth straight month, and the August average was 3.3% lower than August last year. Last month average was $621 a week compared to $642 last year. When compared to the state average, Kingsport-Bristol workers average $175 a week less pay, and the MSA has the lowest average wage among the state’s metro areas.



Bristol – Down 0.5% to 3.3%.

Johnson City – Down 0.6% to 3.8%.

Kingsport – Down 0.5% to 4.1%.

Carter Co. – Down 0.5% to 4.4%

Hawkins Co. – Down 0.7% to 4%.

Johnson Co. – Down 0.5% to 3.6%.

Sullivan Co. – 0.6% to 3.9%.

Unicoi Co. – Down 0.5% to 5.3%.

Washington Co. – Down 0.5% to3 .8%.


Bristol – Down 0.1% to 4.7%.

Norton – Down 0.4% to 5.6%.

Lee Co. – Down 0.1% to 5.5%.

Scott Co. – Down 0.2% to 3.9%.

Washington Co. Down 0.2% to 4.1%.

Wise Co. – Down 0.4% to 7%.


Data sources: August 2017 Bureau of Labor Statistics payroll and household surveys. Unless specified otherwise the nonfarm jobs and labor data are preliminary and not seasonally adjusted. Prelimianry data is revised in the following month’s reports. Trend observatins are based on a three month roling average of the not seasonally adjusted data and revised with current data each month.




Personal income revision shows local economic recovery slower than previously reported

Revised data show the Tri-Cities economy is still clawing its way out of the black hole of the Great Recession and the process isn’t as strong as previously reported.

Across the region’s two Metropolitan Statistical Areas (MSA) the recovery process is uneven. But as a whole, the aggregate all industry gross domestic product (GDP) is down 1.3% from 2015 and the area is down 4.8% from its pre-recession high.


Year-over-year change for all-industry gross domestic product

Kingsport-Bristol’s trend line for its GDP wasn’t changed by the revision. It has declined for four straight years. In general terms, this means there are fewer jobs available, and generally less wealth is being generated by the economy as a whole.  The revision shows the recovery process is slower than previously reported. In 2016 it lagged its previous high by 9.6%. ($1.08 billion).


Year-over-year change all-industries gross domestic product

Instead of small increases in 2014 and 2015, the Johnson City MSA saw a loss in 2014 and a bigger 2015 year-over-year gain. It was the only gain in the since 2013. Although the MSA has not recovered to its pre-recession level, it’s closer that Kingsport-Bristol. In 2016 the MSA’s real GDP was 2.7%  below its pre-recession high.


Here’s how the Bureau of Economic Analysis revision was explained, “BEA also revised GDP by metropolitan statistic area for 2001-2015. Updates incorporated revised earnings data from BEA’s Local Area Personal Income released published in November 2016.”

GDP is the best way to measure the local economy. It’s the total value of everything produced by all the people and companies – local and foreign-owned, in the target area.

Real GDP in the U.S. grew 1.7% in 2016, and that growth was led by professional and business services; information services; finance, insurance, real estate, rental, and leasing.


Professional and business services growth was 2.7%. It contributed to growth in 273 metro areas.

  • Kingsport-Bristol- down 5%.
  • Johnson City MSA – up 2.3%.

Information services up 6.5%. It contributed to growth in 260 metro areas.

  • Johnson City MSA – up 2.1%.
  • Kingsport-Bristol – Not listed to avoid disclosure of confidential information.

Finance, insurance, real estate, rental, and leasing grew 1.2%. Contributed to growth in 217 MSA

  • Johnson City, up 1.1%.
  • Kingsport-Bristol, down 1.7%



  • Retail trade – up 1.3%
  • Information – up 2.1%
  • Professional and business services – up- 2.3%
  • Finance, insurance, real estate, rental, and leasing – up 1.1%.
  • Education services, health care, and social assistance – up 0.9%.
  • Arts, entertainment, recreation, accommodation, food services – up 1.2%


  • Construction – down 12.5%.
  • Manufacturing – down 2.1%.
  • Durable goods and manufacturing – down 1.7%.
  • Nondurable goods manufacturing – down 2.6%.
  • Wholesale trade – down 3.2%.
  • Transportation and warehousing – down 3%.
  • Other services, except government – down 2.6%.
  • Government – down 1%.


  • Utilities – no change.




  • Utilities – up 8.7%
  • Wholesale trade – up 3.6%.
  • Retail trade – up 2.6%.
  • Transportation and warehousing – up 3.4%.
  • Arts, entertainment, recreation, accommodations, and food services – up 2%.
  • Government – up 0.1%.


  • Manufacturing – down 3.7%.
  • Durable goods and manufacturing – down 4.4%.
  • Nondurable goods manufacturing – down 3.4%
  • Finance, insurance, real estate, rental, and leasing – down 1.7%.
  • Professional and business services – down 5%.
  • Education services, health care, and social assistance – down 1.5%.



  • Other Services – Not shown to avoid disclosure of confidential information.
  • Construction – Not shown to avoid disclosure of confidential information.

BEA does not report data when there are three or fewer employees in a sector and to preclude identification of information for a specific establishment in cases where there is a dominant establishment.





Gender pay gap narrows in Washington County; Household incomes see modest increase in Tri-Cities

Median household incomes in Sullivan and Washington counties didn’t see the big 2016 gains they enjoyed in 2015. They also lagged the 3.2% nation-wide gain. They were up. But it was a modest increase. And with one exception in four key wage indicators, trend lines arched lower.

Year-over-year median household income change.

The big salary takeaway from the just-released American Community Survey reports is the steady median wage increase and narrowing gender wage gap for women who work full-time in Washington County, They saw their best year-over-year gain in five years (18.2%) while the wage rate trend for men working full-time and all workers in that county moved lower.

Per capita income in both counties declined last year amid signs of broader wage stagnation. It was down 3.5% in Sullivan County and down 3.2% in Washington County. The decline in both counties was just south of $900 from 2015. It was $24,525 in Sullivan County and $26,340 in Washington County.

Year-over-year change for all workers and both males and females working full-time


Last year saw the Sullivan County median household increase $847 to $42,859 in 2016 inflation-adjusted dollars.

The increase in Washington County was $792 to $46,276.

Sullivan County’s median household wage has increased $8,269 since 2010 (23.9%) compared to a $4,063 (9.6%) gain in Washington County, but it’s been a much bumpier ride as illustrated by the median household income chart.

The household income gap between the two counties has been consistent for the past two years. In 2016, it was $3,417 higher in Washington and $3,472 the year before.

Year-over-year change for all workers and both male and females who work full-time.

Washington County saw increases in the share of households by income in six of the 10 ACS ranges, and the biggest gains were lower-income households. The county saw declines in the two lowest income ranges, but the biggest decline was in households with $50,000 to $74,999 incomes. There was also a loss in the $150,000 to $199,999 range.

Sullivan County saw its share of household by income decline in six ranges. The biggest decline came in $100,000 to $149,999 households. Its biggest gain came in the $75,000 to $99,999 income range.


The poverty rate for all people in Washington County was 14.5%, down 3.1% from the previous year. It was 16.2% in Sullivan County, up 0.4% from 2015.

The vertical black line marks the approximate MIT Living Wage benchmark for two-person households. CLICKING ON IMAGE RENDERS A LARGER FILE>

The family poverty rate in Sullivan increased 0.6% to 11.1% while it declined  1.4% to 10.8% in Washington County.

The share of two-person households below the 2016 MIT living wage level benchmark for Washington County was 37.9% and 40.6% in Sullivan County. The two-person household benchmark was used because it is the highest share of occupied households in Washington County almost the highest share in Sullivan. It was also the highest in owner-occupied households in both counties.


Sullivan County continued to lag its neighbor the south in the median wage for men and women working full-time and for all workers. And male-full time workers in both counties saw a wage drop from 2015.

The median for women working full-time in Washington County was $5,428 higher in 2016; $3,803 higher for men working full-time and $320 for all workers.

The black vertical line marks the approximate MIT Living Wage benchmark. CLICKING ON IMAGE RENDERS A LARGER FILE.

The 2016 medians and compared to 2015 for are:

Sullivan workers – $25,932, down 2.2%.

Washington workers – $25,308, up 1.4$.

Sullivan full-time women workers – $31,054, down 0.6%.

Washington full-time women workers – $36,482, up 18.2%.

Sullivan full-time male workers – $41,622, down 5.6%.

Washington full-time male workers – $45,425, 2.5%.


Full-time male workers still make more money than females, but the gap is closing as women increase their position in the labor force with larger numbers and an increasingly higher education level on their resumes.

Last year a woman working full-time in Washington County earned $8,943 less than her male counterpart.  It was the lowest gap since 2010 and a big gain from the $15,718 gap in 2015.

The 2016 gap in Sullivan County was $10,568. It was the lowest in three years and a $2,200 improvement from 2015.

Sullivan County sees biggest drop in new commercial permits so far this year

While commercial building permits are a product of the business cycle, they’re not always a good indicator of economic health. That’s what the first half of this year looked like on a Tri-Cities regional basis. A drill down to the county level is another story.

New commercial building permits in the Tri-Cities metro area were down 16% during the first half of 2017 and permit values declined from $178.7 million to $114.8 million. Sullivan County saw the lion’s share of the regional decline, while activity in Washington County was flat. The other counties in the region – except Washington Co. VA – saw new permit increases.

The only East Tennessee metro region monitored by The Market Edge’s Commercial Building Permit Trend Report that had a permit and value growth was Knoxville. Permits were up 6.6% and permit values up 5%.

Chattanooga permits were down 28.7% while values were down 31%.

The Tri-Cities region had 301 new permits compared to 360 during the first half of 2016 – a 16.4% decline.

The nearby Asheville market saw an 11% decline in permit value and a 43% drop in the number of permits.

If new commercial permits seem to lag the economy consider this.

Real Gross Domestic Product in the three-county Johnson City Metropolitan Statistical Area (MSA) is approaching its pre-recession high while it’s declining in the four-county Kingsport-Bristol MSA. The most recent measure by the National Association of Counties (NACo) listed economic output recovered in only one NE Tenn. county – Washington. In the SW VA portion of the Tri-Cities Washington, Wise and Lee had a recovered status. That doesn’t mean local economies are in the tank. But some are still in the recovery stage and continue to wrestle with the conversion of a manufacturing based economy to a service economy.

Here’s a quick, broad recap of just two sectors that are drivers for commercial real estate property and permit activity.


Retail sales – as measured by retail sales tax collections – have steadily increased in the Tri-Cities. Much of it fueled by lower gasoline prices.

Like most of the U.S., the Tri-Cities has an abundance of retail space – five time the average in Europe. But much of it isn’t where retailers want to be, or it isn’t suitable for what they want. This has accelerated with the increasing dominance of national retail outlets. E-commerce has taken a toll on brick-and-mortar outlets and retailer are become pickier and picker.

In Sullivan County, the Pinnacle effect has shifted retail activity and demand away from Kingsport to Bristol. Simply put, the Pinnacle had prime sites available and the retail traffic to support them at a time when some retailers were cutting back on the number of stores due to the e-commerce pinch. It has had very little effect on the Johnson City metro retail market. And now that the first phase of the Pinnacle is built out, developer Steve Johnson says it’s time to look at something other than more retail for Phase 2.

Jerry Petzoldt, CEO and General Manager of the TCI Group, said national companies continuously look at our area, but they won’t accept secondary sites. He thinks some of the lack of retail expansion is a direct result of the local lack of prime sites.

Consumers are expected to continue powering the local economy because unemployment is low and many households are in decent shape. Rising home prices, a booming new home sector, strong job growth and higher wages are making a big difference in Washington County. But even outside that growth area, many people feel better about local economies. Nationwide retail spending growth is expected, but not enough to prevent more brick-and-mortar stores from closing.

However, there are signs of consumer fatigue while low private sector wages and underemployment continue to take a toll on the region – especially the Kingsport-Bristol MSA. That doesn’t mean retail in Kingsport-Bristol is not expanding because it is.  But the expansion has taken a backseat to the region’s growth centers.


New construction took off with Sullivan County’s late entry in the what Washington County and Johnson City has enjoyed for the past three years. Currently, that market looks stable. Shane Abraham, founder and operating principal of Universal Development & Construction, says the Washington County, Johnson City apartment supply-demand situation is more balanced than he’s seen. Of course, there are some small pockets of underserved demand, but the balance looks stable. The biggest challenge he sees for the region is wage stagnation.

That’s something where the Johnson City MSA has an edge on its neighbor to the north. Private sector wages in the Johnson City metro area have increased at a higher rate than the national rate increase every month this year. At the same time, Kingsport-Bristol is experiencing a steep decline. The primary drivers are wage stagnation, underemployment and a rapidly aging labor force adding to an already waning lower labor participation force.

Unlike Washington County, the Sullivan County’s apartment supply-demand situation is anything but stable. Property managers are dealing with the infusion of new units. Even though the trend toward renting is strong, some complexes are seeing lower occupancy rates and attractive incentives are being offered by newer projects.  There’s no indication that the expanded apartment inventory is attracting new residents as intended, but there has been a shift of residents from one complex to another. Some managers think the real affect is too much apartment inventory for too little demand.

Here’s a comparison of new commercial permits during the first half of this year compared to the same period last year:

Carter – 21, up 3.

Greene – 44, up 4.

Hawkins – 12, up 7.

Sullivan – 85, down 57.

Washington TN – 102, down 1.

Scott VA – 7 – up 1.

Washington VA 30 – down 16.



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