Tennessee’s economic performance in 2025 has shown solid resilience and steady growth despite broader national uncertainties. The state continues to benefit from a pro-business climate, low tax burden, and ongoing investments in advanced manufacturing, logistics, and healthcare.
In the first half of the year, Tennessee’s unemployment rate remained below the national average, hovering around 3.2%, reflecting strong labor demand across key sectors. Major employers, including Ford’s BlueOval City project in West Tennessee and Oracle’s expansion in Nashville, have helped drive job creation and regional economic development.
The housing market, while cooling slightly from the pandemic boom, remains active, particularly in Middle Tennessee, where Nashville’s metro area continues to attract out-of-state residents. The influx of tech and remote workers has helped bolster consumer spending and retail growth.
Tourism has also played a vital role in the state’s economic momentum. Cities like Nashville, Memphis, Gatlinburg, and Chattanooga have seen record visitor numbers, fueling growth in the hospitality and service industries. The return of international travelers and the strength of domestic tourism have significantly boosted state sales tax revenue.
In agriculture and manufacturing, Tennessee has continued to diversify its industrial base. Investments in electric vehicle production and clean energy technology are positioning the state as a future leader in sustainable manufacturing.
Looking forward, Tennessee is expected to maintain moderate GDP growth through the end of the year, supported by favorable business policies, infrastructure investment, and a diversified economic base. However, rising housing costs and labor shortages in some regions remain challenges.