CHATTANOOGA, Tenn. — A new report shows Chattanooga’s job market is starting to improve, but a local economist says an overall recovery may take some time.
A new report from the University of Tennessee at Chattanooga’s Center for Regional Economic Research (CRER) (read it below) projects thousands of new jobs next year, with most of that growth coming in the second half of the year.
This follows a downturn, with the report showing that the area lost about 1,000 jobs in 2025, marking the first full year of job losses outside of the pandemic or the 2008 recession.
UTC economist Howard Wall says…
“We’ve been losing jobs kind of slowly for about a year and a half. Our forecast from the center is to slowly start recovering jobs, but at a pretty slow pace through the rest of 2026.”
The report shows the economic slowdown was deeper than experts originally thought, with updated data revealing job losses across much of the past year.
Researchers say job growth slowed in mid-2024 and has been negative in most quarters since.
“We used to think, you know, till a couple months ago, or a month ago, that the Chattanooga labor market was growing kind of slowly for the last 18 months,” says Wall. “The benchmark revisions showed that we were actually kind of losing jobs slowly.”
The report says most of those job losses last year came from the manufacturing sector. That industry lost more than one thousand jobs.
Woman searching for job online. Getty Images.
Wall says recent economic policy is to blame for manufacturing job losses.
“Manufacturing has been hit in the last year because of tariffs and difficulty in sourcing raw materials and intermediate goods.”
One the other hand, education and health services saw an increase in jobs.
Wall notes that, even with that growth, the weakness in the manufacturing sector is slowing the overall recovery of the job market.
“It’s slow, and then gradually picks up, and then into 2027, we would call what we expect to be normal,” says Wall.
For now, Wall says the the market is competitive for the jobs that are out there.
“There’s still kind of jobs to be to be had, but it is a bit tougher,” says Wall.
The report projects about 3,200 new jobs in 2026, with most of that growth expected later this year.
Wall notes that’s roughly half of what’s considered a strong year.
Economists add that stronger growth may not arrive until 2027, and the pace of recovery will depend on the national economy.