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Economist tells senators tariffs, demographics and AI reshape Tennessee outlook
Summary
In a broad briefing, Dr. Kessler told the committee that tariffs and trade shifts have depressed some exports and imports, that migration has boosted the state's workforce recently, and that AI and investment trends are influencing GDP and sector performance.
In an hour-long presentation, Dr. Larry Kessler covered trade, demographics and investment trends affecting Tennessee's economic outlook.
He said tariffs and trade-policy changes have already pushed up producer input costs and altered trade flows; imports from China to Tennessee declined notably while exports to Canada and China fell in key sectors. Kessler also highlighted strong recent domestic migration into Tennessee—with nearly 97,000 new residents in 2022 and many in prime working ages—which helps labor supply. He noted longer-term headwinds from an aging workforce and flagged AI-driven investment as a driver of recent GDP gains.
Kessler closed with headline forecasts: a modest employment uptick in 2026 but slower long-run growth than pre-pandemic averages, and urged monitoring of trade developments and efforts to boost labor-force participation through health and education improvements.
