TENNESSEE (WGNS News) - Tennessee’s unemployment rate moved slightly lower in June, returning to its lowest level of 2026 as employers continued to add jobs in several major industries.

The state’s seasonally adjusted unemployment rate fell to 3.5% in June, down from 3.6% in May and unchanged from June 2025. Tennessee’s rate remained below the national unemployment rate of 4.2%, according to the Tennessee Department of Labor and Workforce Development.

While unemployment figures for individual counties and cities have not yet been released for June, the statewide report offers an early indication of Tennessee’s overall labor market. Employers added 25,300 nonfarm jobs over the past year and 2,500 jobs between May and June.

Health care and social assistance produced the state’s largest year-over-year employment gain, adding approximately 13,600 jobs. Employment in the sector increased from about 432,800 positions in June 2025 to 446,400 in June 2026.

Several areas within health care recorded particularly strong growth. Employment at hospitals increased by approximately 7,400 jobs during the year, while nursing and residential care facilities added about 8,400 positions. Ambulatory health care services, which include many outpatient medical offices and treatment providers, increased by approximately 6,400 jobs. The categories may overlap within the broader industry breakdown, but each reflects continued demand for health-related workers across Tennessee.

Leisure and hospitality also recorded significant growth, adding approximately 8,600 jobs over the year. The sector included an increase of about 5,900 positions in arts, entertainment and recreation, while accommodation and food services added approximately 2,700 jobs.

The state’s not-seasonally-adjusted industry figures showed an especially strong monthly increase in leisure and hospitality during June, when the sector gained approximately 7,700 jobs. Arts, entertainment and recreation accounted for about 4,100 of those positions, while accommodation and food services added approximately 3,600. The seasonal increase coincided with summer travel, recreation and tourism activity across the state.

Manufacturing presented a more mixed picture. Overall seasonally adjusted manufacturing employment increased by approximately 1,400 jobs from May to June, largely because of growth in durable goods manufacturing. Durable goods producers added approximately 1,100 positions during the month and 3,100 jobs over the year.

Transportation equipment manufacturing, fabricated metal products and electrical equipment were among the durable goods categories posting increases in the broader industry data. However, nondurable goods manufacturing employment remained approximately 2,800 jobs below its June 2025 level.

Professional, scientific and technical services also added approximately 1,100 jobs during June, one of the state’s largest monthly gains. That sector includes a wide range of specialized positions in engineering, technology, consulting, accounting, research and other professional fields.

Not every major employment sector recorded growth. Financial activities lost approximately 3,100 jobs during the year, while trade, transportation and utilities also declined by about 3,100 positions. Federal government employment decreased by approximately 3,300 jobs.

The report also showed changes in earnings and work hours for Tennessee manufacturing employees. Average weekly earnings declined from $1,079.67 in May to $1,064.45 in June. The average manufacturing workweek fell from 43.8 to 43.2 hours, while average hourly earnings remained nearly unchanged at $24.64.

The statewide labor force participation rate was 59.4% in June on a seasonally adjusted basis, down from 59.6% in May. Approximately 3.49 million Tennesseans were counted in the civilian labor force, including nearly 3.37 million employed residents.

Locally, the most recent available figures showed Rutherford County with an unemployment rate of 2.6% in May. La Vergne recorded one of the county’s strongest year-over-year improvements, with its rate declining three-tenths of a percentage point to 2.4%.

Smyrna’s May unemployment rate stood at 2.5%, down from 2.7% one year earlier. Murfreesboro recorded a rate of 2.7%, compared with 2.8% in May 2025.

Those local figures remained below Tennessee’s statewide rate, although county and municipal unemployment statistics are not seasonally adjusted and should not be directly compared with the state’s seasonally adjusted figure. June unemployment rates for Rutherford County, Murfreesboro, Smyrna, La Vergne and other Tennessee communities will be released separately.