TACIR: Jobs market shows fragility as economists forecast modest growth

Cliff Lippert, executive director of the Tennessee Advisory Commission on Intergovernmental Relations (TACIR), introduced a TACIR economic briefing to the Senate Finance, Ways and Means Committee before senior analyst Michael Mount walked members through national and Tennessee indicators.

Mount said Wall Street Journal survey respondents now expect real U.S. gross domestic product growth a little above 2 percent over the next 12 months but added that U.S. Federal Reserve officials see risks beneath the headline numbers. "Beneath the surface, the labor market's become fragile," Mount said, and he gave a 25 percent probability of a recession in the next 12 months.

Why it matters: The committee is beginning five weeks of budget hearings, and the TACIR briefing provided the economic context members said they will use to evaluate revenue and spending decisions this spring. Mount noted Tennessee's unemployment rates have changed unevenly across metropolitan areas and flagged major local projects, including Blue Oval City, as factors that alter regional employment and supply-chain expectations.

Members asked for more Tennessee-specific analysis. Mount said overall unemployment in Tennessee has moved little year over year and that TACIR will follow up with more metro-level detail on recent East Tennessee announcements. The presentation also reviewed tariff-driven trade shifts and cited a Wharton study showing that tariff revenue gains can be offset by broader changes in purchasing patterns.

The committee used the TACIR briefing as background for Fiscal Review's revenue presentation that followed.