Tennessee Economic Analysis Reports

December 2025

December 2025 Summary

Labor Force

Tennessee’s seasonally adjusted unemployment rate remained at 3.6% in December. The labor force participation rate increased slightly from 60.3% in November to 60.4% in December. The number of people employed increased over 9,600 while the number of people unemployed was essentially unchanged. 

A year ago, the unemployment rate was 3.7% while the labor force participation rate was 59.5%. The total number of people in the labor force has increased more than 91,000 since December of 2024.

Over the year, the number of people unemployed decreased 2,400 compared to an employment increase of 93,600.

The U.S. unemployment rate decreased from 4.5% to 4.4% between November and December. The December labor force participation rate also decreased to 62.5% from 62.4%.

Nonfarm Employment

Total nonfarm employment in Tennessee decreased 5,100 in December. Trade, transportation, and utilities saw the steepest decline with a loss of 3,100 jobs. Transportation, warehousing, and utilities accounted for 1,900 of those lost jobs. Accommodation and food services lost 2,100 jobs while manufacturing lost 1,700 jobs. Durable goods manufacturing was responsible for 1,400 lost manufacturing jobs. Job losses also occurred in administrative, support and waste services (-1,300) and construction (-1,200). The greatest job gains occurred in health care and social assistance, followed by state government (+800), and professional scientific, and technical services (+700).

Over the last 12 months, total nonfarm employment has increased 23,000 jobs. Professional and business services increased 9,200 jobs with an increase of 6,800 jobs in professional, scientific and technical services. Other services and state government each added 6,000 jobs. Substantial job gains also occurred in retail trade (+5,200), leisure and hospitality (+4,500), and private education and health services (+4,000). The greatest job losses occurred in nondurable goods manufacturing (-4,700) and federal government (-3,200). Transportation, warehousing, and utilities followed with a loss of 2,600 jobs. Other sectors losing jobs include construction (-2,500) and financial activities (-2,100).

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