AN ECONOMIC REPORT TO THE GOVERNOR OF THE STATE OF TENNESSEE

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1 AN ECONOMIC REPORT TO THE GOVERNOR OF THE STATE OF TENNESSEE Matthew N. Murray, Associate Director and Project Director Center for Business and Economic Research PREPARED BY THE Center for Business and Economic Research College of Business Administration The University of Tennessee Knoxville, Tennessee IN COOPERATION WITH THE Appalachian Regional Commission Tennessee Department of Finance and Administration Tennessee Department of Economic and Community Development Tennessee Department of Revenue and Tennessee Department of Labor and Workforce Development Nashville, Tennessee THE STATE S ECONOMIC OUTLOOK JANUARY2012

2 CONTRIBUTORS An Economic Report to the Governor of the State of Tennessee AUTHORS UT Center for Business and Economic Research Matthew N. Murray, Associate Director and Project Director William F. Fox, Director Celeste K. Carruthers, Assistant Professor of Economics Vickie C. Cunningham, Research Associate J. Randy Gustafson, Research Associate Melissa O. Reynolds, Research Associate Angela R. Thacker, Research Associate Ahiteme N. Houndonougbo, Graduate Research Assistant Shukhrat Musinov, Graduate Research Assistant UT Department of Agricultural Economics Harwood D. Schaffer, Research Associate Professor, Agricultural Policy Analysis Center Daryll E. Ray, Blasingame Chair of Excellence Professor, Professor and Director of the Agricultural Policy Analysis Center Patricia McDaniels, UTIA Marketing and Communications Services PROJECT SUPPORT STAFF UT Center for Business and Economic Research Betty A. Drinnen, Administrative Specialist Carrie B. McCamey, Communications Coordinator Laura Ogle-Graham, Business Manager The preparation of this report was financed in part by the following agencies: the Tennessee Department of Finance and Administration, the Tennessee Department of Economic and Community Development, the Tennessee Department of Revenue, the Tennessee Department of Labor and Workforce Development, and the Appalachian Regional Commission. This material is the result of tax-supported research and as such is not copyrightable. It may be freely reprinted with the customary crediting of the source. UT Publication Authorization Number R ii 2012 TENNESSEE ECONOMIC REPORT

3 PREFACE This 2012 volume of An Economic Report to the Governor of the State of Tennessee is the thirtysixth in a series of annual reports compiled in response to requests by state government officials for assistance in achieving greater interdepartmental consistency in planning and budgeting efforts sensitive to the overall economic environment. Both short-term, or business cycle-sensitive forecasts, and longerterm, or trend forecasts, are provided in this report. The quarterly state forecast through the first quarter of 2014 and annual forecast through 2021 represent the collective judgment of the staff of the University of Tennessee s Center for Business and Economic Research in conjunction with the Quarterly and s. The national forecasts were prepared by IHS Global Insight, Inc. Tennessee forecasts, current as of January 2012, are based on an array of assumptions, particularly at the national level, which are described in Chapter One. Chapter Two details evaluations for major sectors of the Tennessee economy, with an agriculture section provided by the University of Tennessee Agricultural Policy Analysis Center. Chapter Three presents the long-run outlook and forecast for the state. Chapter Four provides a discussion of higher education progression and graduation from Tennessee universities and colleges. The primary purpose of this annual volume published, distributed, and financed through the Tennessee Department of Finance and Administration, Tennessee Department of Economic and Community Development, the Tennessee Department of Revenue, the Tennessee Department of Labor and Workforce Development, and the Appalachian Regional Commission is to provide wide public dissemination of the most-current possible economic analysis to planners and decision-makers in the public and private sectors. Matthew N. Murray Associate Director and Project Director Center for Business and Economic Research 2012 TENNESSEE ECONOMIC REPORT iii

4 CONTENTS CONTENTS EXECUTIVE SUMMARY... VIII CHAPTER 1: THE U.S. ECONOMY Introduction The U.S. Economy: Year in Review... 2 Components of GDP... 2 Inflation and Prices... 6 The Labor Market The U.S. Forecast... 8 Consumption and the Labor Market... 8 Investment and Interest Rates... 8 Government Spending International Trade Prices and Inflation Alternative Scenarios Forecast Summary and Conclusions CHAPTER 2: THE TENNESSEE ECONOMY: SHORT-TERM OUTLOOK Introduction The Current Economic Environment Fiscal Update A National Perspective Tennessee and the Southeastern States Short-Term Outlook Situation and Outlook for Tennessee Agriculture Overview of Agriculture in Tennessee Tennessee Agricultural Sector Outlook Ag Sector Issues and Opportunities CHAPTER 3: THE TENNESSEE ECONOMY: LONG-TERM OUTLOOK Introduction iv 2012 TENNESSEE ECONOMIC REPORT

5 CONTENTS 3.2. The 2010 Census: The Changing Face of Tennessee Children Hispanics The Older Population Labor Force Income and Poverty Estimates Health Insurance Long-Term Retrospective and Prospective Outlook for Tennessee The Labor Market Income, Earnings and Output CHAPTER 4: THE TRANSITION FROM COLLEGE TO CAREER IN TENNESSEE Characteristics of College Completers and Non-Completers Students Entering Two-Year Schools Students Entering Four-Year Schools Graduation and Time to Degree How Close Were Noncompleters to Graduation? From College to Career Employment of those Entering Two-Year Schools Employment of those Entering Four-Year Schools Student Characteristics and Employment Outcomes: Regression Analysis The Returns to College Persistence: Regression Analysis Conclusions, Policy Implications, and Future Research APPENDIX A: FORECAST DATA... 1 Quarterly Forecast Tables... 1 Forecast Tables APPENDIX B: HISTORICAL DATA Quarterly History Tables History Tables TENNESSEE ECONOMIC REPORT v

6 CONTENTS FIGURES AND TABLES CHAPTER 1: THE U.S. ECONOMY... 1 Figure 1.1. Inflation-Adjusted GDP Growth Expected to Rebound... 3 Figure 1.2. Consumer Sentiment and Spending Growth Restrained... 4 Figure 1.3. Exports Maintain Momentum While Import Gains are Slowing... 6 Figure 1.4. Payroll Gains are Slow, Modestly Trimming Unemployment... 7 CHAPTER 2: THE TENNESSEE ECONOMY: SHORT-TERM OUTLOOK Table 2.1. Total Nonfarm Employment Growth Struggles to Rebound Figure 2.1. Total Nonfarm Employment Growth Shows Wide Variation Across the Southeast Figure 2.2. Many Counties Have Seen Growth in Total Covered Employment Table 2.2. Unemployment Rates Remain Elevated Figure 2.3. House Price Indexes Still on the Decline Figure 2.4. December Tax Collections Reach Pre-Recession Levels but Recovery is Not Over Figure 2.5. Employment Expected to Show Healthy Gains Table 2.3. Selected U.S. and Tennessee Economic Indicators, Seasonally Adjusted Figure 2.6. Growth in Inflation-Adjusted After-Tax Income from 1979 to 2007 Concentrated at the Top of the Income Distribution Figure 2.7. Unemployment Rates Improve Slowly Figure 2.8. Leading Tennessee Commodities for Cash Receipts, Figure 2.9. U.S. Government Farm Program Payments as a Percentage of Tennessee Net Farm Income CHAPTER 3: THE TENNESSEE ECONOMY: LONG-TERM OUTLOOK Figure Years of Tennessee and U.S. Population Growth Figure 3.2. Tennessee Population Growth Largely around Urban Centers Figure 3.3. Uneven Population Growth among Children under Age Figure Hispanic Population Density Figure Percent of Seniors Live within 15 Miles of a Hospital Figure 3.6. Higher Than Average Unemployment Leads to Figure a Shrinking Labor Force vi 2012 TENNESSEE ECONOMIC REPORT

7 CONTENTS Figure 3.8. Median Houshold Income Peaked in Figure 3.9. $145 Billion of Household Income Clustered in Metro Areas Figure Tennessee and U.S. Family Poverty Rates Inch Up Over Decade Figure Tennesseans Not Covered by Health Insurance on the Upswing Figure Tennessee Exhibits Higher Rate of Publicly Funded Health Insurance Table 3.1. Selected U.S. and Tennessee Economic Indicators, Seasonally Adjusted Figure Private Employment Loses Ground, 2000 to 2nd Quarter Figure Private Manufacturing Employment Collapses Between 2000 and 2nd Quarter CHAPTER 4: THE TRANSITION FROM COLLEGE TO CAREER IN TENNESSEE Table 4.1. First-Time Freshmen Entering Two-Year Colleges in 2002 and Table 4.2. First-Time Freshmen Entering Two-Year Colleges in 2002 and Table 4.3. First-Time Freshmen Entering Four-Year Colleges in 2002 and Table 4.4. First-Time Freshmen Entering Four-Year Colleges in 2002 and Table 4.5. Time to Degree Completion for First-Time Freshmen Figure 4.1. Extended Noncompleters Earned Percent Fewer Credits Than Bachelor s Degree Recipients Figure 4.2. Extended Noncompleters Enrolled for Percent Fewer Semesters Than Bachelor s Degree Recipients Figure 4.3. Degree Completers are More Likely to be Working in Tennessee Seven Years After Entering a Community College Figure 4.4. Degree Completers Earn Higher Wages Seven Years After Entering a Community College Figure 4.5. Degree Completers are More Likely to be Working in Tennessee Seven Years After Entering a Four-Year College or University Figure 4.6. Degree Completers Earn Higher Wages Seven Years After Entering a Four-Year College or University APPENDIX A: FORECAST DATA... 1 APPENDIX B: HISTORICAL DATA TENNESSEE ECONOMIC REPORT vii

8 Forecast Data APPENDIX A APPENDIX A: FORECAST DATA In this section Appendix A: Forecast Data Quarterly pages 2 25 (2011:4 to 2014:1) pages (2011 to 2021) Quarterly Forecast Tables Table 1: Table 2: Table 3: Table 4: Table 5: Table 6: Table 7: Table 8: Table 9: Table 10: Table 11: Table 12: Table 13: Table 14: Table 15: Table 16: Table 17: Table 18: Table 19: Table 20: Selected U.S. and Tennessee Economic Indicators, Seasonally Adjusted...2 Selected Per Capita U.S. and Tennessee Economic Indicators, Seasonally Adjusted...4 Tennessee Personal Income Components, Seasonally Adjusted (millions of 2005 dollars)...5 Tennessee Personal Income Components, Seasonally Adjusted (millions of current dollars)...6 Tennessee Nonfarm Employment by Sector, Not Seasonally Adjusted (thousands of jobs)...7 Tennessee Durable Goods Manufacturing Employment, Not Seasonally Adjusted (thousands of jobs)...8 Tennessee Nondurable Goods Manufacturing Employment, Not Seasonally Adjusted (thousands of jobs)...9 Tennessee Nonfarm Employment by Sector, Seasonally Adjusted (thousands of jobs)...10 Tennessee Durable Goods Manufacturing Employment, Seasonally Adjusted (thousands of jobs)...12 Tennessee Nondurable Goods Manufacturing Employment, Seasonally Adjusted (thousands of jobs)...13 Tennessee Average Wage and Salary Rate by Sector, Not Seasonally Adjusted (2005 dollars)...14 Tennessee Average Wage and Salary Rate by Sector, Seasonally Adjusted (2005 dollars)...15 Tennessee Average Wage and Salary Rate by Sector, Not Seasonally Adjusted (current dollars)...17 Tennessee Average Wage and Salary Rate by Sector, Seasonally Adjusted (current dollars)...18 Tennessee Civilian Labor Force and Unemployment Rate, Not Seasonally Adjusted...20 Tennessee Civilian Labor Force and Unemployment Rate, Seasonally Adjusted...21 Tennessee Taxable Sales, Not Seasonally Adjusted (millions of 2005 dollars)...22 Tennessee Taxable Sales, Seasonally Adjusted (millions of 2005 dollars)...23 Tennessee Taxable Sales, Not Seasonally Adjusted (millions of current dollars)...24 Tennessee Taxable Sales, Seasonally Adjusted (millions of current dollars)...25 Forecast Tables Table 1: Table 2: Table 3: Table 4: Table 5: Table 6: Table 7: Table 8: Table 9: Table 10: Table 11: Table 12: Table 13: Table 14: Table 15: Selected U.S. and Tennessee Economic Indicators...26 Selected Per Capita U.S. and Tennessee Economic Indicators...27 Tennessee Personal Income Components (millions of 2005 dollars)...28 Tennessee Personal Income Components (millions of current dollars)...29 Tennessee Nonfarm Employment by Sector (thousands of jobs)...30 Tennessee Durable Goods Manufacturing Employment (thousands of jobs)...31 Tennessee Nondurable Goods Manufacturing Employment (thousands of jobs)...32 Tennessee Average Wage and Salary Rate by Sector (2005 dollars)...33 Tennessee Average Wage and Salary Rate by Sector (current dollars)...34 Tennessee Civilian Labor Force and Unemployment Rate...35 Tennessee Taxable Sales (millions of 2005 dollars)...36 Tennessee Taxable Sales (millions of current dollars)...37 Tennessee Gross Domestic Product by Sector (millions of 2005 dollars)...38 Tennessee Durable Goods Manufacturing Gross Domestic Product (millions of 2005 dollars)...39 Tennessee Nondurable Goods Manufacturing Gross Domestic Product (millions of 2005 dollars) TENNESSEE ECONOMIC REPORT 1

9 TENNESSEE ECONOMIC REPORT Table 1: Selected U.S. and Tennessee Economic Indicators, Seasonally Adjusted History Forecast Data 2011:2 2011:3 2011:4 2012:1 2012:2 2012:3 2012:4 2013:1 2013:2 2013:3 2013:4 2014: US GDP (Bil2005$) SAAR % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr US GDP (Bil$) SAAR % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr TN PERSONAL INCOME (MIL2005$) SAAR % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr US PERSONAL INCOME (BIL2005$) SAAR % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr APPENDIX A Forecast Data TN PERSONAL INCOME (MIL$) SAAR % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr US PERSONAL INCOME (BIL$) SAAR % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr TN NONFARM JOBS (THOUS) % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr US NONFARM JOBS (MIL) % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr TN MFG JOBS (THOUS) % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr US MFG JOBS (MIL) % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr TN UNEMPLOYMENT RATE (%) US UNEMPLOYMENT RATE (%) (CONTINUED ON NEXT PAGE)

10 Table 1: Selected U.S. and Tennessee Economic Indicators, Seasonally Adjusted History Forecast Data 2011:2 2011:3 2011:4 2012:1 2012:2 2012:3 2012:4 2013:1 2013:2 2013:3 2013:4 2014: CHAINED PRICE INDEX, GDP (2005=100.0) % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr US PERS CONSUMP DEFL (2005=100.0) % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr CONSUMER PRICE INDEX, ALL-URBAN (82-84=1.000) % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr BANK PRIME INTEREST RATE (%) FEDERAL FUNDS RATE (% per annum) YEAR FIXED MORTGAGE RATE (%) TN TAXABLE SALES (MIL2005$) % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr TN TAXABLE SALES (MIL$) % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr TENNESSEE ECONOMIC REPORT 3 TN AVG ANNUAL WAGE, NONFARM (2005$) % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr TN AVG ANNUAL WAGE, NONFARM ($) % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr Forecast Data APPENDIX A

11 TENNESSEE ECONOMIC REPORT Table 2: Selected Per Capita U.S. and Tennessee Economic Indicators, Seasonally Adjusted History Forecast Data 2011:2 2011:3 2011:4 2012:1 2012:2 2012:3 2012:4 2013:1 2013:2 2013:3 2013:4 2014: US GDP (2005$) SAAR % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr US GDP ($) SAAR % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr TN PERSONAL INCOME (2005$) SAAR % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr US PERSONAL INCOME (2005$) SAAR % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr APPENDIX A Forecast Data TN PERSONAL INCOME ($) SAAR % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr US PERSONAL INCOME ($) SAAR % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr TN TAXABLE SALES (2005$) % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr TN TAXABLE SALES ($) % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr

12 Table 3: Tennessee Personal Income Components, Seasonally Adjusted Rates (millions of 2005 dollars) History Forecast Data 2011:2 2011:3 2011:4 2012:1 2012:2 2012:3 2012:4 2013:1 2013:2 2013:3 2013:4 2014: TN PERSONAL INCOME % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr WAGES AND SALARIES % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr OTHER LABOR INCOME % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr PROPRIETORS INCOME % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr RENT, INTEREST, DIVIDENDS % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr TRANSFER PAYMENTS % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr LESS: PERS CONT FOR SOC INS % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr TENNESSEE ECONOMIC REPORT 5 RESIDENCE ADJUSTMENT % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr PER CAPITA PERSONAL INCOME ($) % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr Forecast Data APPENDIX A

13 TENNESSEE ECONOMIC REPORT Table 4: Tennessee Personal Income Components, Seasonally Adjusted Rates (millions of current dollars) History Forecast Data 2011:2 2011:3 2011:4 2012:1 2012:2 2012:3 2012:4 2013:1 2013:2 2013:3 2013:4 2014: TN PERSONAL INCOME % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr WAGES AND SALARIES % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr OTHER LABOR INCOME % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr PROPRIETORS INCOME % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr APPENDIX A Forecast Data RENT, INTEREST, DIVIDENDS % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr TRANSFER PAYMENTS % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr LESS: PERS CONT FOR SOC INS % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr RESIDENCE ADJUSTMENT % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr PER CAPITA PERSONAL INCOME ($) % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr

14 2012 TENNESSEE ECONOMIC REPORT 7 Table 5: Tennessee Nonfarm Employment by Sector, Not Seasonally Adjusted (thousands of jobs) 2011:2 2011:3 2011:4 2012:1 2012:2 2012:3 2012:4 2013:1 2013:2 2013:3 2013:4 2014: TOTAL NONFARM % Chg Same Qtr Last Yr NATURAL RESOURCES, MINING & CONSTRUCTION % Chg Same Qtr Last Yr MANUFACTURING % Chg Same Qtr Last Yr DURABLE GOODS % Chg Same Qtr Last Yr NONDURABLE GOODS % Chg Same Qtr Last Yr TRADE, TRANSPORTATION, UTILITIES % Chg Same Qtr Last Yr WHOLESALE TRADE % Chg Same Qtr Last Yr RETAIL TRADE % Chg Same Qtr Last Yr TRANSPORTATION & UTILITIES % Chg Same Qtr Last Yr INFORMATION % Chg Same Qtr Last Yr FINANCIAL ACTIVITIES % Chg Same Qtr Last Yr PROFESSIONAL & BUSINESS SERVICES % Chg Same Qtr Last Yr EDUCATION & HEALTH SERVICES % Chg Same Qtr Last Yr LEISURE & HOSPITALITY % Chg Same Qtr Last Yr OTHER SERVICES % Chg Same Qtr Last Yr GOVERNMENT % Chg Same Qtr Last Yr FEDERAL, CIVILIAN % Chg Same Qtr Last Yr STATE & LOCAL % Chg Same Qtr Last Yr History Forecast Data Forecast Data APPENDIX A

15 TENNESSEE ECONOMIC REPORT Table 6: Tennessee Durable Goods Manufacturing Employment, Not Seasonally Adjusted (thousands of jobs) History Forecast Data 2011:2 2011:3 2011:4 2012:1 2012:2 2012:3 2012:4 2013:1 2013:2 2013:3 2013:4 2014: TOTAL DURABLE GOODS % Chg Same Qtr Last Yr WOOD PRODUCTS % Chg Same Qtr Last Yr NONMETALLIC MINERAL PRODUCTS % Chg Same Qtr Last Yr PRIMARY METALS % Chg Same Qtr Last Yr FABRICATED METAL PRODUCTS % Chg Same Qtr Last Yr APPENDIX A Forecast Data MACHINERY % Chg Same Qtr Last Yr COMPUTER & ELECTRONIC PRODUCTS % Chg Same Qtr Last Yr ELECTRICAL EQUIPMENT, APPLIANCES & COMPONENTS % Chg Same Qtr Last Yr TRANSPORTATION EQUIPMENT % Chg Same Qtr Last Yr FURNITURE % Chg Same Qtr Last Yr MISCELLANEOUS DURABLE GOODS % Chg Same Qtr Last Yr

16 Table 7: Tennessee Nondurable Goods Manufacturing Employment, Not Seasonally Adjusted (thousands of jobs) History Forecast Data 2011:2 2011:3 2011:4 2012:1 2012:2 2012:3 2012:4 2013:1 2013:2 2013:3 2013:4 2014: TOTAL NONDURABLE GOODS % Chg Same Qtr Last Yr FOOD % Chg Same Qtr Last Yr BEVERAGE & TOBACCO % Chg Same Qtr Last Yr TEXTILE MILLS, TEXTILE MILL PRODUCTS & APPAREL % Chg Same Qtr Last Yr PAPER % Chg Same Qtr Last Yr PRINTING & RELATED SUPPORT % Chg Same Qtr Last Yr CHEMICALS % Chg Same Qtr Last Yr PLASTICS & RUBBER % Chg Same Qtr Last Yr MISCELLANEOUS NONDURABLE GOODS % Chg Same Qtr Last Yr TENNESSEE ECONOMIC REPORT 9 Forecast Data APPENDIX A

17 TENNESSEE ECONOMIC REPORT Table 8: Tennessee Nonfarm Employment by Sector, Seasonally Adjusted (thousands of jobs) History Forecast Data 2011:2 2011:3 2011:4 2012:1 2012:2 2012:3 2012:4 2013:1 2013:2 2013:3 2013:4 2014: TOTAL NONFARM % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr NATURAL RESOURCES, MINING AND CONSTRUCTION % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr MANUFACTURING % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr DURABLE GOODS % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr NONDURABLE GOODS % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr TRADE, TRANSPORTATION, UTILITIES % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr WHOLESALE TRADE % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr RETAIL TRADE % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr TRANSPORTATION & UTILITIES % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr INFORMATION % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr FINANCIAL ACTIVITIES % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr (CONTINUED ON NEXT PAGE) APPENDIX A Forecast Data

18 Table 8: Tennessee Nonfarm Employment by Sector, Seasonally Adjusted (thousands of jobs) History Forecast Data 2011:2 2011:3 2011:4 2012:1 2012:2 2012:3 2012:4 2013:1 2013:2 2013:3 2013:4 2014: PROFESSIONAL & BUSINESS SERVICES % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr EDUCATION & HEALTH SERVICES % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr LEISURE & HOSPITALITY % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr OTHER SERVICES % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr GOVERNMENT % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr FEDERAL, CIVILIAN % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr STATE & LOCAL % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr TENNESSEE ECONOMIC REPORT 11 STATISTICAL DISCREPANCY (% ) Forecast Data APPENDIX A

19 TENNESSEE ECONOMIC REPORT Table 9: Tennessee Durable Goods Manufacturing Employment, Seasonally Adjusted (thousands of jobs) History Forecast Data 2011:2 2011:3 2011:4 2012:1 2012:2 2012:3 2012:4 2013:1 2013:2 2013:3 2013:4 2014: TOTAL DURABLE GOODS % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr WOOD PRODUCTS % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr NONMETALLIC MINERALS % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr PRIMARY METALS % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr APPENDIX A Forecast Data FABRICATED METALS % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr MACHINERY % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr COMPUTERS & ELECTRONICS % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr ELECTRICAL EQUIPMENT, APPLIANCES & COMPONENTS % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr TRANSPORTATION EQUIP % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr FURNITURE % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr MISCELLANEOUS DURABLES % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr

20 Table 10: Tennessee Nondurable Goods Manufacturing Employment, Seasonally Adjusted (thousands of jobs) History Forecast Data 2011:2 2011:3 2011:4 2012:1 2012:2 2012:3 2012:4 2013:1 2013:2 2013:3 2013:4 2014: TOTAL NONDURABLE GOODS % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr FOOD % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr BEVERAGE & TOBACCO % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr TEXTILE MILLS, TEXTILE MILL PRODUCTS & APPAREL % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr PAPER % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr PRINTING & RELATED SUPPORT % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr TENNESSEE ECONOMIC REPORT 13 CHEMICALS % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr PLASTICS & RUBBER % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr MISCELLANEOUS NONDURABLE GOODS % Chg Prev Qtr SAAR % Chg Same Qtr Last Yr Forecast Data APPENDIX A

AN ECONOMIC REPORT TO THE GOVERNOR OF THE STATE OF TENNESSEE

AN ECONOMIC REPORT TO THE GOVERNOR OF THE STATE OF TENNESSEE Matthew N. Murray, Associate Director and Project Director Center for Business and Economic Research PREPARED BY THE Center for Business and