Tennessee’s Economy Showing Signs of Slowing Growth
Tennessee’s economy, which has been on a positive trajectory for nearly half a decade, is now showing signs of slowing down, according to recent data. The number of economically distressed and at-risk counties in the state has increased from 35 to 40, marking a shift from last year’s record low. While the state officials have celebrated the decline in distressed counties in the past, this year’s increase did not receive the same level of attention.
The Appalachian Regional Commission, which compiles the distressed county reports, has identified that almost all of Tennessee’s worst-performing counties are in rural areas, particularly in the southwestern and northeastern parts of the state. Despite progress in reducing the number of distressed and at-risk counties since 2017, the recent uptick aligns with a significant slowdown in the state’s GDP growth at the beginning of this year.
Tennessee’s economy, which grew at a 2.8% pace in 2023, has slowed to 1.7% in the first three months of this year, according to the U.S. Bureau of Economic Analysis. Sales tax collections, another key indicator, have also seen a decline in growth, largely driven by inflation. While Tennessee still outpaces the U.S. average in economic performance, the recent trends suggest a need for continued attention to support rural communities and ensure statewide prosperity.
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