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).[1] 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.[1] Throughout the year, Tennessee maintained lower unemployment than the long-term average of 6.15%.[3] 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.[4] 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.[4] 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.[4] 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.[2] Over the past year, the state shed 6,400 jobs, mainly in trade/transportation/utilities and manufacturing.[2] Despite sector challenges, Tennessee's rate remains near its record low of 3.1% from May 2023.[5]