ECONOMY / WORKFORCE
NASHVILLE, Tenn. — Tennessee’s labor market continues to outperform the national average, with the state’s seasonally adjusted unemployment rate holding steady at 3.6% for the third consecutive month, according to new data from the Tennessee Department of Labor and Workforce Development (TDLWD). The consistency signals not a plateau but a floor — a baseline of economic stability that state economists say reflects years of deliberate investment in workforce development, business recruitment, and industry diversification.
The April 2026 figures place Tennessee nearly a full percentage point below the national unemployment rate of 4.3%, a gap that reflects sustained economic strength across much of the state’s workforce. In April 2025, Tennessee’s rate stood at 3.5%, meaning the state has experienced only a modest uptick even as national labor markets have shown more significant strain. That resilience, economists say, is no accident.
“Tennessee’s ability to attract employers and workers alike speaks to the strength of our business climate,” the Tennessee Chamber of Commerce noted in its 2026 Redbook report. “Non-agricultural employment continues to trend upward, supported by job creation across both traditional and high-growth industries.”
Month-Over-Month Gains Across Multiple Sectors
Between March and April, Tennessee employers added 1,200 nonfarm jobs. The largest sector gains came in construction, followed by durable goods manufacturing and accommodation and food services. Those three industries together tell a story of a state in motion — building new infrastructure, producing goods, and welcoming visitors at a pace that keeps service workers busy.
Construction’s top-line performance reflects both public investment and private development activity spreading across Middle and East Tennessee. Major infrastructure projects — from highway improvements to commercial real estate development near Nashville International Airport (BNA) — have kept job demand elevated in the trades.
The accommodation and food services gains are in part a residual of Tennessee’s thriving tourism economy, which generated $15.6 billion in 2024 and ranks fourth in the Southeast. Record visitor numbers at Tennessee State Parks and continued growth in Nashville’s hospitality corridor have kept hiring demand elevated in that sector well into 2026.
Over the past full year, total nonfarm employment grew by 900 jobs statewide. Longer-term gains have been anchored in health care and social assistance, state government, and administrative and support services — sectors with deep roots across both rural and urban Tennessee counties.
Aviation and Healthcare Lead Long-Range Growth
Tennessee’s longer-term employment projections paint a picture of growth concentrated in a handful of high-demand fields. Scheduled air transportation leads all industries with projected growth of more than 18%, driven by expansion at Nashville’s BNA Airport. The airport completed its Concourse D extension in 2025 under the New Horizon program and continues investing in capacity through 2029 — with hiring demand particularly strong in Middle Tennessee for ground operations, maintenance, and customer service roles.
Healthcare remains a dominant force. Outpatient care centers are projected to grow by nearly 5%, and other ambulatory healthcare services by more than 6%, reflecting a broader national shift toward outpatient care settings. Tennessee’s outsized concentration of healthcare employers — particularly in Nashville, which has become one of the country’s leading health care industry hubs — positions the state well to absorb that demand.
The Boyd Center for Business and Economic Research at the University of Tennessee projects 31,400 new jobs in Tennessee across 2026, a 0.9% increase that outpaces the national forecast of 0.5% job growth, even as national economic headwinds from tariff pressures and softening consumer sentiment weigh on businesses across the country.
County-Level Picture: Strength Across 89 of 95 Counties
The statewide numbers are encouraging on their own, but Tennessee’s county-level data adds important texture. Eighty-nine of the state’s 95 counties reported unemployment rates below 5% in April — a remarkable showing for a state that spans densely urban metros, mid-size regional cities, and deeply rural Appalachian communities.
Cheatham and Dickson counties, both in Middle Tennessee just west of Nashville, posted the state’s lowest rates at 2.6%. Seven additional counties — Macon, Knox, Sumner, Wilson, Williamson, Cannon, and Blount — followed close behind at 2.7%. Williamson County, which sits south of Nashville in the state’s most economically prosperous corridor, has consistently ranked among the state’s lowest unemployment counties for years.
The picture was less rosy in pockets of West and rural Middle Tennessee. Maury County recorded the highest unemployment rate in the state at 6.1%, a one-percentage-point jump from its March rate, suggesting localized labor market disruption that may warrant attention from state workforce agencies. Lewis County followed at 5.8%, and Perry County at 5.3%.
State analysts note that county-level rates are not seasonally adjusted, which can produce wider month-to-month swings than the statewide figure and are best interpreted in the context of longer trends.
Youth Employment Program Cited as a Workforce Pipeline
State officials credited the Tennessee Youth Employment Program (YEP), which provides paid work experience for residents aged 14 to 24, as one factor helping keep the labor pipeline healthy even amid national economic headwinds. The program connects young Tennesseans with employers across industries, giving participants hands-on career experience and a living wage while giving businesses early access to motivated entry-level talent.
“For many Tennessee students, the school year may be over, but the learning doesn’t have to be,” TDLWD said in its April report, pointing to YEP as a year-round opportunity for young workers to gain skills and build professional networks. State administrators handle the paperwork and cover program costs for participating employers, making the program particularly accessible for small businesses that lack robust HR infrastructure.
Workforce officials say the program is especially important in counties where youth unemployment tends to run higher than the state average and where traditional pathways into skilled trades or healthcare careers are not always visible or accessible.
A Moment of Resilience — With Caution Ahead
Despite the stability on display in April’s numbers, economists caution that Tennessee is not immune to broader national forces. The Boyd Center noted that federal policy changes — particularly those related to international trade and tariffs — have created disruption to spending patterns and supply chains, and that consumer sentiment across the United States is near an all-time low. Tennessee’s manufacturing sector, which plays an outsized role in counties outside the major metro areas, has not been immune to those pressures.
Still, Tennessee’s gross domestic product has risen to more than half a trillion dollars, placing the state among the top economies in the nation. That output is driven by a diverse mix of industries, including advanced manufacturing, transportation and logistics, healthcare, agriculture, energy, and emerging technology sectors — a diversity that has long provided stability during economic shifts.
TDLWD will release county-level unemployment data for May 2026 on Thursday, June 25, at 1:30 p.m. CDT.
