Tennessee’s unemployment rate edged slightly lower at the start of 2026. According to the Tennessee Department of Labor and Workforce Development (TDLWD), the state’s seasonally adjusted unemployment rate for January stood at 3.5%, a one-tenth of a percentage point decline from December. The rate was unchanged from January of the previous year. Tennessee continued to outperform the national average, which was 4.3% in January.

The state’s unemployment rate had remained quite stable throughout 2025, fluctuating only between 3.5% and 3.7% each month.

Over the past year, Tennessee employers added a total of 5,900 nonfarm jobs, with the largest gains coming in the health care and social assistance sector, followed by state government and the arts, entertainment, and recreation sector. From December to January, total nonfarm employment rose by 7,200 jobs, led by increases in private education and health services, professional and business services, and financial activities.