Tennessee Unemployment Dips to 3.5%, Outpaces U.S. in Nashville Report

NASHVILLE — Tennessee kicked off 2026 with a seasonally adjusted unemployment rate of 3.5%, down 0.1 percentage points from December 2025 and matching the rate from January 2025, according to the Tennessee Department of Labor and Workforce Development (TDLWD). The figure significantly undercuts the U.S. rate of 4.3%, continuing the state's streak of outperforming national averages after a stable 2025 where rates hovered between 3.5% and 3.7% monthly. Throughout the year, Tennessee maintained lower unemployment than the long-term average of 6.15%.

County-level data underscores the strength in Middle Tennessee suburbs: Williamson County posted the state's lowest rate at 2.7%, up slightly from December, followed by Cheatham and Wilson counties at 2.8% each. Eighty-four of Tennessee's 95 counties reported rates below 5% in January, though 90 saw slight increases month-over-month; outliers included Perry County's 11.3% high, up 6 points. These local figures, released April 9, highlight resilience in affluent areas near Nashville while rural spots like Cocke (6.4%) and Pickett (6%) counties lag.

February brought a minor uptick to 3.6%, still 0.8 points below the U.S. 4.4%, but nonfarm employment dipped by 9,200 jobs statewide from January, with losses in private education and health services, trade/transportation/utilities, and leisure/hospitality. Over the past year, the state shed 6,400 jobs, mainly in trade/transportation/utilities and manufacturing. Despite sector challenges, Tennessee's rate remains near its record low of 3.1% from May 2023.