Georgia has weathered the Covid employment loss but not all counties had recovered as of mid-2022

The continuing good news is how Georgia’s employment recovered from Covid-related layoffs and firings, but that overall number ignores how employment changes at the county level has been uneven.

The U.S. Bureau of Labor Statistics has now released job numbers through June 2022, and even as the state added 136,572 jobs between February 2020 and June 2022, 61 counties out of 159 remained below their pre-Covid employment levels. This comes even as Georgia has outpaced the nation in job creation during that period with the state employment rising by 3%, more than twice the 1.4% recorded nationwide.

Counties losing employment

Of the 61 counties, 17 counties were already losing jobs prior to February 2020, so it is more difficult to say how the Covid-related layoffs affected these counties. One county, Burke, is an outlier in that the massive expansion of the Plant Vogtle nuclear facility has distorted the county’s underlying jobs numbers by pushing them up during the height of construction and then seeing them recede as construction comes closer to a conclusion.

For the remaining 43 counties, the employment losses, while not large when measured statewide, can be significant to local economies.

A county-by-county employment count shows that while many of these counties are in rural parts of the state, some counties struggling with continued job losses include Cherokee, Cobb and Clayton counties in the Atlanta metro area, Clarke County (Athens metro area), Richmond County (Augusta metro area), Muscogee County (Columbus metro area), and Bibb County (Macon metro area).

As a percentage of total county employment, the largest losses have occurred in:

Randolph County -289 (-14.7%)

Montgomery County -223 (-14.0%)

Dooly County -447 (-12.6%)

Taliaferro County -21 (-9.7%)

Jones County -354 (-8.3%)

Sumter County -742 (-6.8%)

For the counties in metro areas of the state, the losses remain significant. Clarke County is showing 4,762 fewer jobs (-6.7%) compared to its February 2020 numbers, Muscogee County -3,883 (-4.1%), Bibb County -3,400 (-4.1%), Clayton County -3,912 (-3.2%), Richmond County -2,535 (-2.4%), Cherokee County -190 (-0.3%), and Cobb County -154 (-0.0%).

In total, the 43 counties have lost 30,926 jobs (-2.2%) from February 2020 to June 2022. Keep in mind that these losses have occurred even though Georgia has outpaced the nation in job growth over the same time period.

Counties gaining employment

While the losers have been overlooked, the counties winning the employment battle have also been ignored. Many of these 16 counties, like many of the losing counties, start from a relatively small employment basis, so small net gains can have a large impact on local economies.

For some counties, such as Coweta, Jackson, and Butts, the large percentage increases reflect the Atlanta area’s continued population expansion as rural counties become drawn more into the Atlanta metro region. Jackson County is a good example of a county located along the I-85 corridor with lower land costs and allowing easy access to the Atlanta, Athens, and Gainesville metro areas for workers willing to commute.

A number of these counties are outside metro areas, some in the North Georgia mountain region such as Rabun and Union counties, and while it is hard to measure the work-from-home (WFH) movement, it is likely having an impact on these counties, as well as the possibility that people choosing retirement after Covid-related closures and layoffs also chose to move to these close-to but not in metro areas for quality-of-life reasons.

Morgan County with its employment growth is somewhat similar to Jackson County since it is located on the I-20 corridor, close to the Athens metro area, and offers a favorable work-from-home as well as a retirement environment.

Counties showing large percentage increases in employment between February 2020 and June 2022 include:

Jackson County 9,404 (29.5%)

Berrien County 673 (20.1%)

Bryan County 1,578 (17.4%)

Morgan County 1,226 (16.7%)

Hart County 823 (12.5%)

Lumpkin County 945 (12.4%)

Coweta County 4,879 (12.0%)

Warren County 156 (11.9%)

Marion County 134 (11.9%)

Butts County 850 (11.6%)

Rabun County 593 (11.3%)

Union County 779 (11.3%)

Clinch County 254 (11.0%)

Decatur County 880 (10.8%)

Candler County 348 (10.6%)

Long County 104 (10.1%)

 Conclusion

Georgia has certainly benefited from the nation’s economic recovery, post-Covid employment gains, but that benefit has not been shared equally among all of the state’s 159 counties. Some are well-positioned for the next downturn in the economy, if one comes, while others have still not recovered from previous losses. It remains to be seen how state policies will affect these separate groups of counties moving forward in to 2023.

Georgia unemployment rate remains low in October

 Government employment in Georgia grows faster than private sector 

for the first time since early 2020 employment losses

Georgia Total Nonfarm Employment, January 2020-October 2022

Source: U.S. Bureau of Labor Statistics

Georgia’s overall unemployment rate remained low and employment growth was moderate in October, according to new information released by the U.S. Bureau of Labor Statistics.

Private sector employment in the state rose less than the increase in government for the first time since the onset of Covid-related employment declines in early 2020. All data are seasonally adjusted and subject to revision.

Unemployment

The state posted a 2.9% unemployment compared to 3.4% in October 2021. Over the month, the state’s labor force slipped to 61.8, while the employment-population ratio moved down to 60.0. The number of unemployed workers in the state increased by 3,954, while 5,573 workers left the labor force.

Even with the decline, the state’s labor force remains 68,859 above the level reached a year ago.

Nonfarm employment

Georgia recorded little change in the number of jobs in October recording 3,700 net new jobs in October. Over the past year, the state has seen a growth of 204,500 jobs, which translates to a 4.4% job growth rate.

For the first time since the losses in early 2020, growth in government jobs outpaced the private sector, as government employment grew by 2,000 while the private sector added 1,700 new jobs. Prior to early 2020, the last time Georgia saw government growing faster than the private sector was in late 2018 during the economic slowdown that occurred at that time.

Private sector employment grew at the slowest pace since early 2020.

Industries reporting higher job numbers over the month included construction (1,600), financial activities (1,400), health care and social assistance (1,200), leisure and hospitality (1,100), and other services (1,000).

These gains were partially offset by job losses in manufacturing (-3,100) and wholesale trade (-1,400). Other industries showed only small movements up or down over the month.

State government showed no job growth in October, with local governments adding 1,400 employees and federal government agencies in Georgia increasing by 600.

Fewer people quit, were laid off or fired in Georgia; job openings and hires remained essentially unchanged over the month

Job openings and hires in Georgia showed no significant change from August to September, according to new information released by the U.S. Bureau of Labor Statistics. Total separations declined significantly over the month as fewer people quit their jobs and employers laid off or discharged fewer workers.

Nationally, the job openings and hire rates were little changed in September, while the total separations rate decreased.

Job openings and hires

In September, job openings totaled 402,000, up from 391,000 in August but down from the 410,000 recorded a year ago. While announcements of job openings rose, the number of actual hires totaled 264,000 compared to 275,000 in August. In September 2021, the number of hires were 266,000. Neither the change in the number of job openings or hires over the month were statistically significant according to BLS.

Job openings and hires can be indicators of the level of optimism on the part of employers about future economic conditions. When employers are optimistic about future prospects, they tend to post more openings and hire people. As employers become more pessimistic about the future, the number of job openings and hires tend to decline.

Separations

The number of people leaving their jobs in September, both for voluntary and involuntary reasons, dropped by 64,000 in September to 224,000, the lowest level since last October.

BLS noted that the change in total separations, quits, and layoffs and separations over the month were statistically significant.

People choosing to quit their jobs declined by 19,000. Workers deciding to quit their jobs either to move to another employer or to drop out of the labor force can indicate their degree of optimism about their future economic conditions. When workers are optimistic about future opportunities, they are more willing to voluntarily leave their current job. As workers become more pessimistic about the future, the number of workers choosing to quit tends to decline.

Most of the decline in total separations in September was due to a 45,000 decrease in the number of layoffs and discharges. The number of layoffs and discharges in September totaled 41,000 compared to 63,000 last year. 

The low number of layoffs and discharges may indicate that employers are reluctant to lose workers, because they need their current level of workers to maintain production and are concerned about their ability to replace them with other workers.

Consumers in the Atlanta area saw some slowing of inflation in October although annual increases remained above the national average

The Consumer Price Index for All Urban Consumers in the Atlanta-Sandy Springs-Roswell, Ga., metropolitan area rose 10.7% in the 12 months ending in October according to new information released by the U.S. Bureau of Labor Statistics.

Because BLS publishes the full CPI index only every two months for the Atlanta area, there is no comparable 12-month increase available for the year ending in September. For the 12 months ending in August, the all-items index rose 11.7%.

Nationally, consumer prices rose 0.4% over the month and 7.7% for the 12 months ending in October.

Food at home

Consumers in the Atlanta area saw no net increase in their costs for food at home in October after seeing a 1.0% increase in September. October was the first month since last November that consumers had seen no increase in their monthly grocery bill. For the 12 months ending in October, food at home costs rose 14.0%, below the 15.5% increase posted for the year ending in September.

Shelter

Costs for shelter in the Atlanta area rose 0.7% in October after increasing 1.0% the previous month. For the 12 months ending in October, the index rose 13.2%.

In October, rents increased 0.5% over the month. Since last October, rents in the Atlanta area have risen 12.2%.

Owners’ equivalent rent of residences advanced 0.8% in October, smaller than the 1.3% rise recorded in September. Over the past 12 months, owners’ equivalent rent has grown by 14.0%, the same annual increase recorded in September.

Gasoline

Gasoline prices continued to decline in October although at a slower pace. Over the month, gasoline prices in the Atlanta area dropped 1.5% after declining 13.6% and 8.1% in August and September, respectively.

For the 12 months ending in October, gasoline prices rose 3.4%, as the Georgia governor continued his moratorium on the state’s fuel tax. The annual increase was the smallest recorded since January 2021 and follows 19 consecutive months of annual increases in the double digits.

Atlanta compared to the U.S.

Nationwide in October, costs for food at home increased 0.5% over the month and rose 12.4% over the year.

Looking at national data, rent increased 0.8% in October and increased 7.5% for the 12 months ending in October.

Owners’ equivalent rent of residences increased 0.7% over the month for the nation and rose 6.9% over the past year.

Gasoline prices moved up 3.1% in October nationwide resulting in a 17.5% rise since last October.

Georgia unemployment rate unchanged in September as state’s labor market continues to roll along

Georgia’s labor market saw the fourth straight month of low unemployment as the state’s unemployment rate remained unchanged at 2.8% in September.

While such a low unemployment rate is good news for job seekers, the fact that the state’s unemployment rate has steadied at this low level might indicate that labor market conditions have reached their peak employment levels.

Without an influx of new workers from outside the state or the decision of potential workers who have left the labor market to return to paying positions, Georgia employers face difficult decisions as to whether to operate without increasing their workforce or to increase their workforce by raising wages to lure workers.

In either case, the low unemployment rate puts stresses on the state’s economy and indicates the possibility of higher inflation in this full employment environment.

One sign of the stress in the labor market for employers is the dropping of the state’s labor force. From January to June, Georgia’s labor force grew by 73,830 (seasonally adjusted). Between June and September, the labor force dropped by 14,997.

The number of workers employed declined by 8,265 from June through September, while the number of unemployed workers dropped by 6,732. Potential workers are leaving the labor force, presumably because they feel they can financially afford the loss of a paycheck. Only a sharp reversal in the economy might bring them back to seek employment.

All these numbers explain why the Federal Reserve continues to focus on raising interest rates to slow the rate of inflation even if it means a slowing of the economy. Although the Fed has a dual mandate for both inflation and employment, it finds a present imbalance as unemployment continues to run below trend while inflation rates continue above trend.

It is impossible to precisely say when an economy is “overheating”, but the continued low unemployment rates along with high levels of inflation (at least compared to the recent past) may be indicators of an “overstimulated” economy.

Nonfarm employment

In September, the state’s nonfarm employment rose by 13,000, approximately the same number as in August. Private sector employment increased by 10,400, just below August’s revised increase of 11,900.

For the nine months ending in September, the state’s nonfarm total employment has increased by 160,200 compared to an increase of 133,500 for the same period in 2021.

In the private sector, jobs increased by 143,600 over the nine-month period, compared to 134,700 for the same period last year.

Both the total nonfarm and private sector nonfarm job numbers are new records for the state, as they have set new records each month since the end of last year.

Atlanta Federal Reserve Bank President Raphael Bostic: A terrible disappointment

On Friday afternoon, it was disclosed that the President of the Atlanta Federal Reserve Bank, Raphael Bostic, had failed to disclose financial transactions including ones that violated Federal Reserve trading rules.

In his amended Financial Disclosure Report under the Comments section, it reads:

“Consistent with the Federal Reserve’s enhanced ethics procedures, Board ethics officials reviewed Reserve Bank presidents’ financial disclosures beginning this year. In the course of reviewing Raphael Bostic’s disclosure, we discovered that he filed materially incomplete annual disclosures during all prior years in office. After he spent several months retrieving information and amending his disclosures, we concluded that (1) he omitted a substantial number of securities transactions from the disclosures that he previously filed; (2) he held more than $50,000 of Treasury funds in violation of then-applicable Board policy; and (3) he had extensive trading activity during FOMC trading blackout periods and during March-April 2020, which he explains was carried out by third-party financial advisors with investment discretion within managed accounts. The certification of this report is based on the understanding that he has now corrected his prior disclosures and divested his Treasury funds (and other funds that are now prohibited by the Investment and Trading Policy for FOMC Officials), and he and his financial advisor have affirmed that all future trades will be compliant with Federal Reserve policies. His past violations were referred to the Board for any additional action that it deems appropriate.”

From the statement above, it appears that Mr. Bostic did not self-disclose his violations but only admitted to them after they were discovered by Board ethics officials.

In his defense, Mr. Bostic asserts that he did not manage the investments themselves and was unaware of the trades or their timing.

In a news release issued by the Federal Reserve Bank of Atlanta Board Chair Elizabeth A. Smith, it says:

“The Federal Reserve Bank of Atlanta's board of directors has been made aware of inaccuracies in President Raphael Bostic's forms that disclose his personal financial assets and transactions. Furthermore, we learned of transactions that took place during blackout periods and of holdings that violated guidelines set out by the Federal Open Market Committee, or FOMC.

After reviewing the documents and discussing these issues with President Bostic and the Atlanta Fed's chief ethics officer, the board acknowledges the violations and accepts President Bostic's explanation. My board colleagues and I have confidence in President Bostic's explanation that he did not seek to profit from any FOMC-related knowledge.

The directors appreciate that President Bostic has thoroughly corrected his financial forms, going back to when he first joined the Atlanta Fed. We are satisfied with his revised financial disclosures and the changes he has made in managing his investments. The board is also satisfied that President Bostic has established procedures to ensure that future violations do not occur.”

What now?

As the New York Times notes, this is not the first trading scandal involving the Federal Reserve, and you would have thought that the previous problems would have made Mr. Bostic more cautious in his financial activities.

As Jeanna Smialek writes for the Times:

“The Fed’s independent watchdog investigated each official’s trades, much as it will now investigate Mr. Bostic’s. It largely absolved the Fed vice chair, though the results of the other two investigations have yet to be released. Both of the Fed presidents in question — Robert Kaplan and Eric Rosengren — left their posts, and the vice chair, Richard Clarida, stepped down earlier than expected. Other explanations were given for some of those resignations. The central bank ushered in a new and much stricter set of stipulations that limit when, how and what central bankers can trade.”

In any case, Mr. Bostic has destroyed his own credibility as a commentator on economic matters and damaged the Atlanta Federal Reserve Bank’s credibility as well, and it was all so unnecessary. The President of the Atlanta Federal Reserve Bank is a very responsible position and is well compensated. Was the small additional income from these trades really needed? Was it worth the damage to his reputation just to make an additional few dollars? Or did he just think he wouldn’t be caught?

The Atlanta Fed runs an extensive education program, but all that is wasted if the person at the head of the bank cannot be trusted. Whether Mr. Bostic resigns or stays on will depend, probably, on how much pressure is brought to bear, but in either case, his reputation, and the reputation of the Federal Reserve Bank of Atlanta has been damaged with longer lasting consequences. A terrible disappointment. 

Atlanta area consumers continue to face rising costs as grocery prices rise 15.5% over the year, the fastest increase since the 1970s

Consumers in the Atlanta area continued to see significant increases in their grocery costs, rent, and gasoline costs in September, according to new information provided by the U.S. Bureau of Labor Statistics.

Food at home

Atlanta area consumers saw their grocery food costs rise by 1.0% in September, which despite being a significant monthly increase, was the lowest monthly change since December. Between January and August of this year, monthly food costs had increased between 1.1 to 2.0% each month.

As a result of the continued large monthly increases, costs for food at home advanced 15.5% over the year. Consumers in the Atlanta area are experiencing annual increases in grocery costs that have not been seen since 1974, which means most Atlanta consumers have not seen these levels of increases in grocery costs in their lifetimes.

A full list of changes in consumer prices for all urban consumers in the Atlanta-Sandy Springs-Roswell, Ga., area, not seasonally adjusted, is provided by BLS for even-numbered months, while a partial list is provided in odd-numbered months (January, March, May, July, September, and November).

Shelter

For most consumers, housing comprises the largest part of their budget, followed by food and transportation.

In September, rents increased 0.9% over the month, the smallest monthly increase since March. Over the year, rents in the Atlanta area rose by 12.9%, a smaller annual increase than recorded in August. Renters would have to go back to 1980 to see the equivalent of the annual rent increases being experienced in the summer of 2022 in the Atlanta area.

Owners’ equivalent rent of residences advanced 1.3% in September, less than the 1.7% increase recorded in August. Over the past 12 months, owners’ equivalent rent has grown by 14.0% making it nearly equivalent to the 12-month increase recorded in August.

Gasoline

Gasoline prices declined for the third consecutive month, dropping 8.1% in September, a smaller decrease than experienced in August. Despite recent declines, gas prices in the Atlanta area stood 10% above the levels recorded in September 2021. The increase comes despite the Georgia governor’s decision to continue to suspend the state’s motor fuel tax, which moderated the cost of gasoline to consumers in the state.

Atlanta compared to the U.S.

Compared to the U.S. overall, Atlanta consumers are experiencing faster rising costs for food at home, rent, and owners’ equivalent of rent, while seeing slower increases in the cost of gasoline.

Nationally, costs for food at home increased 0.6% over the month and rose 13.0% for the 12 months ending in September.

Rent increased 0.9% over the month and rose 7.2% over the year, while owners’ equivalent rent advanced 0.8% over the month and 6.7% over the year.

Gasoline prices for the nation fell 5.6% in September, but posted a 18.2% increase for the 12 months ending in September.