(The Center Square) – Tennessee’s new business filings for the second quarter of 2026 were up 23.1%, second only to the new business filings for the first quarter of this year, according to Secretary of State Tre Hargett.
“Just when you start to give up hope, with all of the things going on in the world, we see more data from your office that show just record-breaking numbers of new firm establishments,” Dr. Don Bruce, director of the Boyd Center for Business and Economic Research at the University of Tennessee, said to Hargett in a conference call with reporters on Wednesday to discuss the Quarterly Indicator report. “And that’s just continuing to grow quarter after quarter and we’re just very impressed by that. It just speaks to the health of the underlying Tennessee economy.”
Another sign of strength in the Tennessee economy is growth in gross domestic product, at 2.4%, higher than the national rate of 2%.
The gross domestic product is fueling other economic positives, including income growth and a 3.5% increase in personal income.
“The problem we’ve had in the last couple of months is that incomes are growing a little bit more slowly than prices,” Bruce said. “And when you have inflation at 3.4%, you’d like it to be close to 2%, you tend to see an erosion in purchasing power.”
Inflation is driven almost entirely by oil prices, but it’s not just gasoline purchases and airline tickets, Bruce said. Oil prices have increased since the U.S. began a military conflict with Iran.
“Everything we buy depends on oil,” Bruce said. “And I would suggest that inflation by category across the board would be lower if not for the oil price spikes that we’ve seen this year. The clearest opportunity for progress on inflation is to get those oil prices back under control.”
Gas prices in Tennessee are 89 cents higher than they were a year ago, at $3.68 per gallon of regular unleaded gas, according to AAA.
Tennessee’s unemployment rate is 3.4%, but labor force participation has dropped sharply, particularly among those 55 and older, according to Bruce.
“We still have far more workers now than we did five or six years ago,” Bruce said. “And that short-term volatility is not what I would call a long-term trend. I would not be forecasting employment declines on a long-term basis for the state of Tennessee.”
