Tennessee July 2026 unemployment lowest in two years despite economy shedding 400 jobs

Tennessee recorded its lowest unemployment rate in two years in July 2026. The Tennessee Department of Labor and Workforce Development reported a 3.4% unemployment rate, down from 3.5% in both June 2026 and year-over-year from July 2025. The last time Tennessee had an unemployment rate of 3.4% was July 2024. The U.S recorded an unemployment rate of 4.1% in July 2026. Despite the decline in the unemployment rate, Tennessee’s economy also shed 400 jobs between June and July with the biggest declines in the leisure and hospitality, retail trade, and nondurable goods manufacturing sectors. Year-over-year, the state has gained 31,300 nonfarm jobs with the largest gains in the healthcare and social assistance, administrative support, and waste services sectors.