Phil Bredesen meets with Times Free Press editorial board

Unemployment in metropolitan Chattanooga rose to the highest monthly level in nearly 25 years last month, with the six-county region shedding nearly 7,000 jobs over the past year.

The Tennessee Department of Labor and Workforce Development reported Thursday that Chattanooga’s jobless rate rose to 8.7 percent in February — the highest rate since July 1984.

Unemployment climbed even higher in neighboring metro Cleveland, Tenn., where the rate jumped to 9 percent, and in metro Dalton, Ga., where unemployment reached 12.9 percent.

“Our economy is in as much trouble as it has been in a long time,” Gov. Phil Bredesen said Thursday in a meeting with the editorial board of the Chattanooga Times Free Press. “What is the greatest concern to me is how patchy the economy is.”

The governor said he believes most of Southeast Tennessee will fare better than the rest of the state because of planned billion-dollar investments from Volkswagen in Chattanooga and Wacker Chemical in Bradley County.

Last month, 23,090 people in metro Chattanooga were out of work, according to Tennessee and Georgia labor departments. Metro Chattanooga includes Hamilton, Sequatchie and Marion counties in Tennessee and Catoosa, Walker and Dade counties in Georgia.

Despite the increase in unemployment, Hamilton County’s 7.3 percent jobless rate in February was nearly one-fourth less than Tennessee’s overall 9.5 percent unadjusted unemployment level or the comparable 9.3 percent statewide rate in Georgia.

Metro Dalton, the self-described carpet capital of the world, continued to have the highest unemployment rate last month among Georgia’s 13 metropolitan areas. Employment in the Dalton area has dropped by 5,702 jobs over the past year, driving up the jobless rate to the highest levels since the early 1980s, state records show.

“Until housing and construction comes back, Dalton is going to suffer,” Dalton Mayor David Pennington said. “We’ve had higher unemployment rates than this before in Dalton, and I think our businesses are faring somewhat better in this downturn than they did in the 1970s and the early 1980s. But it’s never fun, and hopefully we’re getting close to the peak in our unemployment rate.”

Rural areas of Tennessee and Georgia continue to suffer from the highest jobless rates, according to state records. In February, unemployment hit double-digit rates in 63 of Tennessee’s 95 counties and in 87 of Georgia’s 159 counties.

“Much of our manufacturing base is in rural areas, and it’s been manufacturing that has really been hammered in this recession,” said David Penn, director of the Center for Business and Economic Research at Middle Tennessee State University.

In Tennessee, unemployment was highest in Perry County in Middle Tennessee at 24.1 percent and in Lauderdale County in West Tennessee at 17.9 percent.

“Those rates are Depression-era levels of unemployment,” Gov. Bredesen said. “I’m really going to try to focus now on what to do with the dozen or so counties that have just fallen off the wagon.”

The governor said he still is developing plans for helping distressed rural communities. But he hinted that he may try to use federal stimulus funds available for home weatherization and energy conservation programs to pump more money into hard-hit counties.