Wednesday, September 28, 2022

Unemployment data went the wrong way in Georgia during August

 In what may be a harbinger of slower economic times, 6 of Georgia’s 13 metropolitan areas showed increases of 0.3-0.4% in their unemployment rates in August compared to the previous month. Only the Dalton area showed no change over the month.

In some circumstances, increases in the rate of unemployment would not be a concern and might even be seen in a more positive light.

For example, small changes in unemployment rates (0.0-0.1%) could be simple variation in small statistical samples. Such changes should be ignored month-to-month and be focused on over-the-year changes.

Even larger changes in unemployment rates could be seen in a positive light if the rise was because people who were previously outside the labor market chose to rejoin. Those “labor market re-joiners” would increase the areas’ labor forces while falling into the ranks of the unemployed as they search for a position.

Unfortunately, in 10 of the 13 areas, and most significantly including the state’s largest labor market of Atlanta, the labor force declined in August.

In the Atlanta metro area, the labor force declined by 14,859 as the number of employed dropped by 20,468 and the number of unemployed increased by 5,609 resulting in the unemployment rate increasing by 0.2% to 3.0%.

If there is any good news from the latest reports compiled by the U.S. Bureau of Labor Statistics, it is that unemployment rates remain well below their levels in August 2021.

In August 2021, the Atlanta unemployment rate stood at 3.9%. Whereas, in August 2021, Albany posted the highest unemployment rate among the state’s metro areas at 5.2%, in August 2022, Albany’s rate had dropped to 4.2%, although still the highest among the metro areas.

The Gainesville, Ga., area posted the lowest rate in both August 2021 and 2022, dropping from 2.7% last year to 2.5% presently.

 Even as the state's nonfarm job numbers rose by 15,800 in August, after seasonal adjustment, the rise in unemployment coupled with declines in the labor force show that even Georgia is not immune to a slowdown in the national economy related to rising interest rates.

List of Georgia metro area unemployment rates, August 2022

Albany, 4.2%

Athens, 2.9%

Augusta, 3.5%

Brunswick, 3.1%

Columbus, 3.9%

Dalton, 3.6%

Gainesville, 2.5%

Hinesville, 3.3%

Macon, 3.5%

Rome, 3.1%

Savannah, 2.9%

Valdosta, 3.2%

Thursday, September 22, 2022

Atlanta inflation slows in August but danger increases as signs that inflation becomes more embedded beyond food and energy

The Consumer Price Index for All Urban Consumers for the Atlanta-Sandy Springs-Roswell, Ga., area rose by 1.3% in the two-month period ending in August, according to the U.S. Bureau of Labor Statistics. This increase was smaller than the 2.4% increase recorded in the May-June period. BLS provides a full inflation report for the Atlanta area six times a year.

For the 12 months ending in August, the Atlanta area saw an inflation rate of 11.7% compared to the national increase of 8.3%.

Food costs rose 2.8% over the two-month period with costs for food at home rising 3.0% as costs for food away from home increased 2.5%. For the 12 months ending in August, food costs in the Atlanta area were up 12.6%, as costs for food at home rose 14.6% and costs for food away from home increased 9.8%.

Offsetting some of the increase in food costs, energy costs dropped 10.1% over two months with costs for gasoline declining 19.2%. Over the year, energy costs in the Atlanta area have risen 16.8%, led by a 19.6% increase in gasoline costs despite the state’s suspension of its motor fuel tax.

Excluding the volatile food and energy sectors, costs for all other consumer items in the Atlanta area rose 2.3% for a 12-month increase of 11.0% in August. The over-the-year increase was the largest recorded for the Atlanta area since BLS began bimonthly reporting in 1999.

The fact that consumer items less directly tied to food and energy costs were rising at such a steep rate means that companies were able to pass along increases to consumers and that slowing price increases will be a much harder job as companies and consumers adjust to continued higher costs with companies demanding higher prices and workers demanding higher wages to offset these prices.

For example, the costs for services in the Atlanta area rose 1.9% in the two months ending in August and increased 11.0% over the year.

Housing costs remain elevated with the cost of housing in the Atlanta area rising 2.7% over two months and increasing 12.8% over the past year.

Rent of primary residence increased 3.3% in the two months ending in August, while rental costs have risen 13.5% over the year.

Thursday, August 25, 2022

Atlanta metro area’s 2.8% unemployment rate in July says a lot about the current state of the labor market

Atlanta metro area employment and unemployment numbers for July tell an interesting tale about the area’s current labor market.

The Georgia Department of Labor reports that the area’s unemployment rate dropped to 2.8%, down 0.4% over the month as the number of unemployed persons declined by 11,842.

With the number employed growing by only 692, most of the decline came as 11,145 people dropped out of the labor force.

People choose to enter or exit the labor force for multiple reasons. Pressure on family budgets can draw people into seeking employment, while the opportunities to earn higher wages can also induce people to exchange their nonwork time for a paycheck.

Groups of people who are outside the labor force normally include nonworking spouses of employed people, fulltime students, and people who have chosen to retire from employment and are living off their pensions and retirement savings.

With inflation in the Atlanta area running at an annual rate of 11.5% as of June, it would be expected that inflation pressures would drive people back into seeking work, but so far, the July numbers do not indicate that is the case.

On a more positive side, higher wage rates might also encourage people to seek employment, but the reluctance of employers to raise wages, and therefore increase their employment costs, has muted wage increases.

At least for now you have a standoff. People seeking employment are finding it relatively easy to find work, but people who remain outside the labor force are not rushing in to fill vacancies. Probably, this equilibrium will not continue.

Longer term, if inflation continues to erode savings and household earnings, or if employers choose to raise wages because they find they are losing business due to unfilled vacancies, more people may choose to seek employment and thus increase both the labor force numbers as well as possibly the unemployment rate.

Alternatively, if the economy slows, employers may find it unnecessary to fill vacancies and may begin to lay off workers. This effect will also increase the unemployment rate.

In either case, it is likely to expect the Atlanta area unemployment rate to increase over the next year.

Wednesday, August 24, 2022

Fulton County average weekly wage above $2,000; exceeds U.S. employment and wage growth rates in 1st quarter of 2022

 Both employment and wages in Fulton County (part of the Atlanta, Ga., metro area) grew faster than the nation over the 12 months ending in March 2022, according to new information provided by the U.S. Bureau of Labor Statistics.

Average weekly wage in Fulton County was $2,068, the highest average recorded among the large counties in the state. Nationally, the average weekly wage came in at $1,374.

Employment in Fulton County grew by 5.8% over the year, while wages increased by 8.3%. Nationally, employment grew by 5.0%, as wages increased by 6.7% over the year. 

Of the 11 largest counties in Georgia, only Fulton and Clayton counties (both in the Atlanta, Ga., area) recorded employment growth faster than the nation with Clayton County employment rising by 8.4%. Muscogee County (Columbus, Ga., area) was the only large county in the state that showed a decline with employment, dropping 0.4%.

With the publication of the first quarter 2022 data, Forsyth County was added as one of the nation’s 355 largest counties by employment. With the addition, Georgia now has 11 counties that meet the criteria to be included in the nation’s largest counties which was expanded to include all counties with employment of 75,000 or more.

Compared to 10 years ago, two counties (Forsyth and Hall) in Georgia have been added to the nation’s largest counties by employment size. No county has been dropped from the list.

Of the nine counties that appeared on both the first quarter 2012 and 2022 lists, Fulton County recorded the fastest employment growth of 27.8% over the decade followed by Chatham County (Savannah, Ga., area) 24.1%, Cobb County (Atlanta, Ga., area) and Gwinnett County (Atlanta, Ga., area) 20.1%.

Two of the nine counties have recorded employment declines over the past decade with Muscogee County (Columbus, Ga., area) down 2.2%, and Bibb County (Macon, Ga., area) down 0.5%.

Average Weekly Wages

Seven counties in Georgia saw the average weekly wage increase faster than the nation. Hall County (Gainesville, Ga., area) recorded a 10.4% increase in wages followed by DeKalb County that showed a 10.2% increase in the average weekly wage.

Other counties with average weekly wage percentage increase greater than the nation included Chatham County (Savannah, Ga., area) up 9.4%, Fulton County (Atlanta, Ga., area) 8.3%, Forsyth County (Atlanta, Ga., area) 7.9%, Gwinnett County (Atlanta, Ga., area) 7.5%, and Cobb County (Atlanta, Ga., area) 6.6%.

Bibb County (Macon, Ga., area) recorded the lowest average wage of the large counties in the state at $970 per week as well as recording the smallest increase over the year at 2.2%.

 

Table 1. Largest Georgia Counties Employment Levels

County                                    1st Quarter 2012                            1st Quarter 2022

Bibb County                                       79,900                                                  79,500

Chatham County                              132,000                                                 163,800

Clayton County                                 111,100                                                 118,800

Cobb County                                      301,900                                               371,700

DeKalb County                                  276,100                                                300,400

Forsyth County                                 N/A                                                         79,300

Fulton County                                   711,700                                                 909,900

Gwinnett County                             306,300                                                  367,800

Hall County                                         N/A                                                      92,100

Muscogee County                           92,900                                                      90,900

Richmond County                            99,000                                                   102,700

Friday, August 19, 2022

Georgia’s July unemployment rate: Nothing to see here

 Georgia Nonfarm Employment

Georgia’s unemployment rate in July came in at 2.8%, statistically unchanged from the prior month while remaining below the national unemployment rate of 3.5%.

The unemployment rate is calculated by comparing the number of unemployed to the state’s labor force, and both numbers showed very little change over the month. The number of employed persons in the state was statistically unchanged as well.

In July 2021, the state recorded an unemployment rate of 3.9%, so this month’s rate is statistically much lower than its year-ago level.

Concerningly, the state’s labor force growth has slowed significantly since the beginning of the year, even as initial claims for unemployment continue to decline in the state.

Even as labor force growth slows, the state’s labor market remains strong. Nonfarm employment for July totaled 4,812,100, another record, although the increase over the month (12,500) was not statistically significant.

From July 2021 to July 2022, Georgia has seen an increase of 214,300 nonfarm jobs for a 4.7% growth rate.

With Atlanta posting an inflation rate of 11.5% (as of June), it remains to be seen whether pressures on household budgets due to increasing costs may push people back into the labor force.



Wednesday, August 17, 2022

Job openings and quit numbers turn positive in June for Georgia as layoffs and discharges decline

The number of job openings posted in Georgia rebounded in June, rising by 51,000, according to new information from the U.S. Bureau of Labor Statistics. The number of job openings for May was revised up to 376,000 from a preliminary count of 367,000

Job openings totaled 427,000 compared to 368,000 recorded a year ago, an increase of 9.3%. The job openings rate rose to 8.2 in June, up from a revised 7.3 in May.

The number of hires were statistically unchanged over the month and over the past year.

While the total number of separations were virtually unchanged over the month, the number of people choosing to leave their positions rose while the number of layoffs and discharges declined.

Quits rose by 27,000 in June to a total of 211,000, the same number of quits posted in June of 2021. The quit rate in June came in at 4.4, up from 3.8 in May but below the 4.6 rate recorded the prior year.

Layoffs and discharges declined by 24,000 in June to a level of 42,000 in the month. The layoffs and discharges rate dropped from 1.4 in May to 0.9 in June. The number of layoffs and discharges occurring over the month was the lowest level recorded since May 2019.

Over the past 12 months, the number of layoffs and discharges in the state have declined by 21,000.

The increase in job openings can be taken as a proxy for increasing business optimism, while the number of quits can be a proxy for increased optimism among employees who feel more confident about finding another position. 

Companies seeing better business conditions in the state along with an increasing number of employees leaving their jobs voluntarily is resulting in less need for layoffs and discharges and generally reflect more robust economic conditions in Georgia. 

Wednesday, August 10, 2022

Atlanta area inflation in July for key items remains a problem for consumers

 

Costs for food at home and rent remained elevated in July, although gas costs declined after rising in the previous two months.

While the All-Items index in Atlanta-Sandy Springs-Roswell, Consumer Price Index for All Urban Consumers, is published only for even numbered months, the U.S. Bureau of Labor Statistics does produce a few numbers for the Atlanta area on a monthly basis and these are now available for July 2022.

In July, costs for food at home rose 1.9%, the seventh consecutive month that this index has posted a monthly increase of greater than one percent. Over the first seven months of 2022, costs for food at home have increased 11.3%, while over the past 12 months, the index has risen 13.0%, the highest 12-month increase since BLS began posting monthly changes in 1999.

Rent of primary residence increased 1.0% in July, a smaller monthly increase than was posted in May and June of this year. So far in 2022, rent costs have risen 6.5% and have increased 12.8% over the past 12 months. As with food at home, this is the highest 12-month increase since BLS began posting monthly changes in 1999.

Gasoline costs dropped 6.6% in July, after rising in May and June. Despite last month’s decline, gasoline prices have increased 30.3% since the beginning of 2022 and have risen 39.6% over the past 12 months. This increase has occurred despite the governor’s order since April to suspend the collection of motor fuel and diesel fuel taxes. Without this suspension, retail gasoline costs would have been even higher.

National comparisons

Comparing increases in consumer costs for the nation with those in the Atlanta area, costs for food at home have risen at approximately the same rate nationally as in the Atlanta area, while the Atlanta area continues to see faster rising rents. Nationally, rent of primary residence has increased 6.3%, less than half of the rate of increase recorded in the Atlanta area.

Gasoline costs have risen at a slightly slower rate in the Atlanta area than for the nation, which posted in July a 12-month increase of 44.0%. While a few states, including Connecticut, New York, and Maryland, have suspended their state motor fuel taxes, which offsets a portion of the cost increase for consumers and subsequently lowers the index for gasoline (all types), most states continue to collect their tax.