Tennessee Economic Analysis Reports

August 2025

August 2025 Summary

Labor Force

Tennessee’s seasonally adjusted unemployment rate remained at 3.6% in August. The labor force participation rate increased slightly from 59.9% to 60.0%. The number of people employed increased over 9,100 in August while the number of people unemployed only increased 260.

A year ago, the unemployment rate was 3.6% while the labor force participation rate was 59.6%. The total number of people in the labor force has increased more than 61,000 since August of 2024.

Over the year, the number of people unemployed has increased 2,063 compared to an employment increase of 59,363.

The U.S. unemployment increased from 4.2% to 4.3% between July and August. The August labor force participation rate also increased to 62.3% from 62.2%.

Nonfarm Employment

Total nonfarm employment in Tennessee increased 9,500 in August. Transportation, warehousing, and utilities added the most jobs at 2,200 while retail trade and construction both added 2,000 jobs. Other notable increases include other services (+1,700), accommodation and food services (+1,100), and professional and business services (+1,000). The greatest job losses occurred in wholesale trade and arts, entertainment, and recreation, both shedding 700 jobs. Nondurable goods manufacturing followed with a loss of 500 jobs while information lost 300 and federal government lost 200. No other industries experienced a decline in August.

Over the last 12 months, total nonfarm employment increased 34,400 jobs. Government saw the largest net increase at 10,300 jobs. While federal government dropped 700 jobs, state government added 6,500 and local government added 4,500. Professional, scientific, and technical services added 7,900 jobs and leisure and hospitality added 6,400, of which 4,800 were in accommodation and food services. Other sizable increases include retail trade (+5,600), durable goods manufacturing (+2,300) and private educational services (+1,700). The greatest losses occurred in nondurable goods manufacturing (-3,600) and financial activities (-1,800). The only other over-the-year declines were transportation, warehousing, and utilities (-700), construction (-300), information (-200), and management of companies and enterprises (-200).

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