NASHVILLE, Tenn. — Tennessee closed out the summer with its jobless rate parked at 3.4%, the September reading from the state labor department shows, the third month in a row at that mark and tied for the lowest level the state has posted this year, while employers kept adding jobs.
The seasonally adjusted figure did not budge from July or August and sits one-tenth of a point under where it stood in September 2025, when it was 3.5%. Prior to this summer, Tennessee had not seen a rate at or below 3.4% since July 2024.
The state continues to outperform the country. The national rate ticked up during September, going from 4.1% to 4.2%.
Payrolls kept growing. Employers in Tennessee have added 28,400 nonfarm jobs across the past 12 months, led by leisure and hospitality, with healthcare and social assistance next and state government third. From August to September alone, nonfarm employment rose by 2,500, with leisure and hospitality, professional and technical services, and government posting the biggest monthly gains.
The household survey behind the rate tells a more mixed story. In September, the count of employed people rose by 5,800 and the count of jobless people fell by 1,700, while labor force participation edged up to 59.3% from 59.2%. Over the full year, though, the labor force has contracted by more than 51,100 people and participation is well below the 60.6% recorded a year earlier.
State leaders are pairing the numbers with new training money. The TNWorks effort that Gov. Bill Lee started a year ago across six state agencies worked with 6,300 employers in its first year. A new TNTalent program now offers Tennessee employers access to $5 million in federal workforce funds aimed at nuclear energy, AI infrastructure and advanced manufacturing.
County-level unemployment figures for September are due from the state on Oct. 22.
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