Memphis Economy: Logistics, FedEx, and the Mississippi

The Memphis metro area — formally Memphis, TN-MS-AR, which stretches across the Mississippi River into northern Mississippi and eastern Arkansas — is one of the most logistics-concentrated metros in the United States. It is the global headquarters of FedEx, the home of the FedEx Express world hub at Memphis International Airport (one of the busiest cargo airports in the world), a major Mississippi River port, and the center of one of the densest distribution-warehouse clusters in North America. Memphis's economy runs on moving things, full stop.

This is a plain-English tour of how the Memphis metro economy works. For the state-level picture, see Tennessee Economy. For the country-level view, see The State of the U.S. Economy and the broader Economy hub and city cluster.

How big is the Memphis metro economy?

For example, recent metro GDP for Memphis, TN-MS-AR has run around $90 billion, according to the Bureau of Economic Analysis. Metro population is roughly 1.3 million, per the U.S. Census Bureau. That makes the Memphis metro larger by population than 8 of the 50 U.S. states.

The biggest industries

A handful of sectors do most of the work in the Memphis metro economy:

• Logistics, distribution, and freight — FedEx is headquartered in Memphis and operates its world air hub at Memphis International Airport, one of the busiest cargo airports anywhere. The Port of Memphis on the Mississippi River, BNSF and CN intermodal yards, and a massive distribution-warehouse cluster across DeSoto County (Mississippi) and Crittenden County (Arkansas) employ a huge share of the metro's workforce.
• Healthcare — Methodist Le Bonheur, Baptist Memorial, Regional One Health, and St. Jude Children's Research Hospital together employ huge numbers of workers across the metro. St. Jude's research operations give the metro a major medical-research footprint.
• Manufacturing — International Paper is headquartered in Memphis, and the metro hosts a Mitsubishi Electric plant, a Smith and Nephew orthopedics plant, and a long supplier base. Auto parts, food processing, and packaging fill out the sector.
• Higher education — the University of Memphis, Rhodes College, Christian Brothers, and the University of Tennessee Health Science Center anchor faculty and staff workforces.
• Financial services and back-office — First Horizon (formerly First Tennessee), AutoZone (headquartered downtown), and a deep back-office cluster employ a meaningful white-collar workforce.
• Music and tourism — Beale Street, Graceland, Sun Studio, Stax, and the National Civil Rights Museum drive a meaningful travel sector.
• Agribusiness — Memphis is a major regional center for cotton, soybeans, and rice trading, with grain elevators, processing plants, and trading operations along the river.

Jobs and wages

Metro labor data is published by the Bureau of Labor Statistics Southeast region. For example, the Memphis metro unemployment rate has typically run close to or a tick above the national average, with logistics employment driving most of the metro's job swings.

Tennessee uses the federal minimum wage of $7.25 in its portion of the metro, Mississippi also uses the federal minimum, and Arkansas sets a statewide minimum wage above the federal floor. The latest rates are at the Tennessee Department of Labor and Workforce Development, the Mississippi Department of Employment Security, and the Arkansas Department of Labor and Licensing.

Cost of living

Memphis's cost of living is among the most affordable of any large U.S. metro. For example, recent HUD Fair Market Rent for a two-bedroom in the metro has run around $1,200 a month, with East Memphis, Germantown, Collierville, and Olive Branch (MS) higher and parts of north and south Memphis lower. Current county-level numbers are at HUD User.

The federal government tracks region-specific inflation data through the BLS Southeast region. Memphis's CPI tends to track close to the national average month to month.

Taxes in Memphis

Tennessee has no state income tax on wages. Combined sales tax in Shelby County is 9.75%, made up of the state's 7% base plus city, county, and transit pieces — among the highest combined sales-tax rates in the country. Property taxes are moderate by U.S. standards but vary across the three states in the metro. Mississippi and Arkansas portions of the metro pay their own state income tax. State rules live at the Tennessee Department of Revenue, and you can read more about how sales tax works in our glossary.

How the Memphis metro fits into the national picture

Memphis is one of the most-cited U.S. examples of a metro built around a single logistics function. When U.S. and global e-commerce, healthcare-product shipping, and just-in-time supply chains run hot, FedEx and the broader logistics cluster hire aggressively. When freight slows, the metro feels it within weeks. The growth of healthcare, biomedical research, and back-office work has steadied the broader employment base.

The world's busiest cargo airport — most years

Memphis International Airport's status as one of the top two cargo airports in the world (often trading places with Hong Kong) is the single most important fact about the metro economy. Federal data on cargo airports lives at the Federal Aviation Administration, and FedEx's metro footprint is tracked by the Bureau of Transportation Statistics.

A note on the numbers

Numbers in this article change every quarter — always check the latest from BEA, BLS, and HUD User for the most current data on the Memphis metro.