Wednesday, September 15, 2021

Atlanta area inflation: Consumer prices continue to rise, but at a slower rate in August

 

Consumer prices in the Atlanta metro area advanced 1.1 percent in the two months ending in August 2021, according to new information released by the U.S. Bureau of Labor Statistics for the Consumer Price Index for All Urban Consumers (CPI-U) for the Atlanta-Sandy Springs-Roswell, Ga., metropolitan area.

The two-month rise in prices was less than the two-month increases recorded earlier in the year for the February, April, and June periods. The CPI-U for the Atlanta area is published bi-monthly.

Food prices rose 0.6 percent over the two-month period ending in August, while energy prices increased 1.5 percent. Excluding food and energy, the index for all other items rose by 1.1 percent.

For the 12 months ending in August 2021, consumer prices in the Atlanta-Sandy Springs-Roswell, Ga., area rose by 6.6 percent, slightly less than the 12-month increase recorded in June.

Food prices increased 1.3 percent over the year and energy prices moved up by 26 percent. Excluding food and energy, the index for all other items rose by 5.8 percent for the 12 months ending in August, the same as the 12- month percentage increase recorded in June.

12-month inflation rates for selected items

Gasoline costs rose 51.7 percent in the 12 months ending in August 2021, compared to a 22.6 percent drop recorded in the previous 12-month period. The higher gasoline costs along with a 30.9 percent increase in the cost of used cars and trucks contributed to a 19.9 percent rise in the transportation index.

Costs for shelter, which includes both rent of primary residence as well as the owners’ equivalent rent of residences, increased 5.8 percent over the year.

Atlanta compared to United States

For the two months ending in August, consumer prices in the Atlanta area rose faster than the nation, with the U.S. index increasing by 0.7 percent compared to the 1.1 percent reported for the Atlanta metro area.

Food prices nationwide rose 1.1 percent over two months, while energy prices increased 2.5 percent. Excluding food and energy, the index for all other items moved up by 0.5 percent.

Over the past 12 months, the index for all items for the United States increased 5.3 percent, while consumer prices in the Atlanta area moved up by 6.6 percent.

Looking at the CPI over 24 months 

Disruption to consumers and businesses due to Covid-19 restrictions and shutdowns in 2020 resulted in consumers cutting back on some purchases while shifting expenditures for other purchases. 

Nationally, average annual expenditures for all consumer units in 2020 were $61,334, a 2.7-percent decrease from 2019, and the U. S Bureau of Labor Statistics reported that nine of the 14 major components of household spending decreased during 2020. 

As a result, there is some value in looking at consumer prices over a 24-month period in addition to the normal over-the-year report. 

Over the 24-month period from August 2019 to August 2021, consumer prices in the Atlanta metro area averaged 3.7 percent over each of the past two years, while nationally consumer prices averaged 3.3 per cent per year. 

Using the 3.7 percent average over each of the past two Augusts, consumer prices in the Atlanta area are at their highest 12-month level for an August period since August 2011, when the 12-month increase was 3.8 percent.

Friday, August 20, 2021

Georgia did not reached its pre-pandemic employment levels in July

 

Georgia released its statewide employment data for July 2021 on August 19. In announcing that the state’s unemployment rate had dropped to 3.7 percent, the Georgia Department of Labor news release headline read: 

Unemployment Rate Drops to Pre-Pandemic Level in July (GDOL News Release)

 While the good news is that the state’s unemployment rate did drop by three-tenths of one percent from June to July, the state has not yet achieved the levels it had gained in March 2020 before pandemic-related cutbacks and closures caused a sharp increase in the state’s unemployment rate and an equally sharp contraction of its employment levels. 

Unemployment rate

In October 2019, the state reported a record low unemployment rate of 3.3 percent, which it maintained through January 2020; but by February, the rate was starting to creep upwards, reaching 3.6 percent in March 2020.   

Layoffs exploded in April 2020, with the state reporting an unemployment rate of 12.5 percent. Since then, there has been a continual reduction in the unemployment rates up to the present.

Unemployment rates are typically published to only one decimal point, but it is possible to carry out the calculation to multiple decimal points and carrying out the calculation to four decimal points, one can see that the March 2020 rate was technically 3.5923 percent. 

This compares to the July 2021 rate of 3.7421, or a difference of 0.1498 percentage points, which falls within the limits of what the U.S. Bureau of Labor Statistics would call statistically insignificant, so the State of Georgia chose to declare it had reached the pre-pandemic level of March 2020 because the state labor agency could technically defend the statement. 

The Georgia Commissioner of Labor, Mark Butler, could have waited until the August numbers are published to confirm that that the state’s unemployment rate had reached pre-pandemic levels, but that would have been taking the risk that the seasonally adjusted unemployment rate for August might not continue to show a decline. 

Labor force, employment, and unemployment



While the number of unemployed in Georgia has steadily declined as the number of people employed has increased, neither measure equals the levels achieved in March 2020. 

From March 2020 to July 2021, the number of unemployed has increased by 6,491, while the number of employed individuals has dropped by 41,424. 

As a result, the state’s labor force, which is by definition a combination of employed and unemployed, has actually declined by 34,933, or nearly 0.7 percent. 

This brings the state’s labor force slightly below the level it reached in October 2019, even though the state’s population has continued to increase. 

The situation is also reflected in other data published by BLS for Georgia. Georgia’s labor force participation rate has declined from 62.9 percent in March 2020 to 61.7 percent in July 2021. Labor force participation rate is defined as representing the number of people in the labor force as a percentage of the civilian noninstitutional population. In other words, the participation rate is the percentage of the population that is either working or actively looking for work. 

Georgia’s employment-population ratio has also dropped from 60.7 percent in March 2020 to 59.4 percent in July 2021. The employment-population ratio represents the number of employed people as a percentage of the civilian noninstitutional population. In other words, it is the percentage of the population that is currently working. 

What happened to these people? Statisticians do not know. Some may have chosen to retire, others may have simply dropped out of the labor force. Whether and when they will re-enter the labor force is also unknown. What is known is that there is a group of former workers who so far have not been re-employed as of July 2021, so implying that the state has fully recovered its pre-pandemic levels seem premature at best. 

Nonfarm employment

 

The State of Georgia and BLS also publish a separate monthly survey of nonfarm jobs, and this also confirms that the state has not yet reached its pre-pandemic levels. 

In July 2021, nonfarm jobs in Georgia totaled 4,572,100. While this was a good increase from June (up by 43,600), it still leaves the state 64,900, or 1.4 percent, short of the number obtained in March 2020 and more than 94,000 jobs short of the highest level achieved in February 2020. 

Much of this shortfall can be attributed to the disappearance of jobs in the Atlanta metro area, where July’s jobs total of 2,797,200 is still 67,100 jobs below the level it achieved in March 2020, and 89,500 short of its peak in January 2020. 

Whether the state, and the nation, can continue to grow its employment base remains to be seen, as Covid-related variants raise questions about the ongoing strength of the economy through the end of 2022, but in any case, there is still more work to be done to re-establish all the employment that has been lost from the pre-pandemic time.

 

Note: All data discussed are seasonally adjusted. Seasonal adjustment is a statistical procedure that removes the effects of normal seasonal variations—resulting from events such as holidays, school openings and closings, and weather—from data series. Seasonally adjusted data make it easier to observe cyclical and other economic trends, such as those associated with general economic expansions and contractions. For further information, see Seasonal adjustment of Current Population Survey (CPS) estimates.

Charts are from the bls.gov website.

Friday, August 13, 2021

New Census data show how Georgia’s workforce is changing

Newly released 2020 Census data shows that Georgia’s workforce continues to become more urbanized, more ethnically diverse, and more concentrated in the Atlanta area.

In 2010, 45.6 percent of the state’s population resided in Georgia’s 10 largest counties; in 2020 this percentage grew to 47.7 percent. Of the state’s 10 most populous counties, 8 of them are in the Atlanta area, with the other two being Chatham County (Savannah) and Muscogee County (Columbus).

Between 2010 and 2020, 78 percent of the state’s population growth occurred in the Atlanta metropolitan area, as the metro area saw its population grow by 803,087 out the statewide total increase of 1,024,255. Metro Atlanta is now home to 57 percent of the state’s population up from 54.6 percent in 2010.

Job concentration in the Atlanta metro area

In April 2020, 59 percent of employment in Georgia was situated in the Atlanta metro area.

As in 2010, in 2020 Fulton County remained the state’s most populous county, as well as the location of the largest number of jobs, although nearby Gwinnett County showed faster population growth over the decade.

In 2020, Fulton County held 10 percent of the state’s population and nearly 20 percent of the state’s jobs.

Georgia’s second most populous county, Gwinnett County, accounted for 9 percent of the state’s population and 8 percent of the state’s jobs.

A more diverse population leads to a more diverse workforce

As the state added population, fewer of its residents identified themselves as White alone. The number of residents identifying themselves as White alone declined by 4 percent over the decade.

Persons identifying themselves as White alone accounted for 51.9 percent of the state’s population but this percentage increased to 58.0 percent when persons were counted as White alone or in combination with another race.

Individuals identifying as Black or African American alone or in combination came in at 33.0 percent, with people identifying as Asian alone or in combination accounting for 5.3 percent.

Persons identifying themselves as Hispanic or Latino accounted for 10.5 percent of the population.

In the state’s most populous county, Fulton County, White alone accounted for 39.3 percent of the population, while in Gwinnett County, they accounted for 35.5 percent.

In both counties, the number of people identifying as White alone recorded significant drops from the 2010 Census when Fulton County reported a White alone population of 44.5 percent, and Gwinnett County recorded a 53.3 percent rate.

All of the Atlanta metro area’s 8 largest counties showed declines in the number of people reporting themselves as White alone since the 2010 Census.



Thursday, August 12, 2021

Georgia unemployment claims drop but remain at elevated levels

 Initial claims for unemployment benefits in Georgia declined by 3,254 to 10,152 in the week ending July 31, 2021, according to the U.S. Department of Labor’s Employment and Training Administration. The decline offset the rise of 1,421 claims in the previous week. In comparison, the state recorded 62,335 initial claims for the week ending August 1, 2020.

For the four weeks ending July 31, initial unemployment claims in the state fell by 24 percent, approximately the same percentage decline recorded in the previous four-week period in June.

Initial claims fell significantly in the week ending June 26, after Georgia chose to end $300 per week Federally-funded unemployment benefits, but have slowed their descent since that date.

Claims still remain elevated well-above their pre-Covid numbers, when weekly claims averaged closer to 5,300 in February and March 2020, before Covid-related cutbacks and shutdowns caused the sharp acceleration in mid-March of 2020.

An initial claim is a claim filed by an unemployed individual after a separation from an employer. The claimant requests a determination of basic eligibility for the UI program. When an initial claim is filed with a state, certain programmatic activities take place and these result in activity counts including the count of initial claims. 

According to the U.S. Department of Labor’s Employment and Training Administration, the count of U.S. initial claims for unemployment insurance is a leading economic indicator because it is an indication of emerging labor market conditions in the country. 

Continued claims

Continued unemployment claims declined by -2,765 to 87,963 in the week ending July 31, 2021. In contrast, continued claims totaled 572,455 in the week ending August 1, 2020. For the comparable week in 2019, the state recorded 25,319 continued claims.

A person who has already filed an initial claim and who has experienced a week of unemployment then files a continued claim to claim benefits for that week of unemployment. On a weekly basis, continued claims are also referred to as insured unemployment, as continued claims reflect a good approximation of the current number of insured unemployed workers filing for UI benefits. 

The U.S. Labor Department’s Employment and Training Administration argues that a count of U.S. continued weeks claimed is also a good indicator of labor market conditions. While continued claims are not a leading indicator (they roughly coincide with economic cycles at their peaks and lag at cycle troughs), they provide confirming evidence of the direction of the U.S. economy. 


Thursday, August 5, 2021

Georgia unemployment claims leveling off after benefit cutback effects fade

 When Georgia chose to end its involvement in the additional $300/week unemployment benefits being provided by the Federal government, Governor Kemp stated as its reasoning: 

“We've got to get more people in the work force," Kemp said on America's Newsroom. "We have a record number of jobs in Georgia. Georgia is open for business!” (WTGS

As a result of the state’s decision, effective June 26, 2021, Georgia’s unemployment benefits reverted back to its usual unemployment rules with unemployment benefits ranging from a minimum weekly benefit of $55 and the maximum of $365 based on the amount of wages earned in the base period for a maximum period of 20 weeks (Georgia DOL website). 

With several weeks of information on the state’s unemployment insurance claims now available, we can draw some tentative conclusions about the effect of that decision on the number of people in Georgia requesting unemployment assistance. 

Georgia initial claims 

A review of Initial unemployment claims in Georgia show a pattern of decline over a two-week period from 19,761 reflecting the week ending June 26, down to 12,605 for the week ended July 10. From that point, the number of initial claims has remained steady at approximately 12,000 each week for following two weeks, reflecting the weeks ending July 17 and July 24. 

Between the weeks ending June 26 and July 24, the weeks since the change in unemployment benefits, Georgia has seen a 7,095 decline in initial claims; a drop of 36 percent. 

An initial claim is a claim filed by an unemployed individual after a separation from an employer. The claimant requests a determination of basic eligibility for the UI program. When an initial claim is filed with a state, certain programmatic activities take place and these result in activity counts including the count of initial claims. 

According to the U.S. Department of Labor’s Employment and Training Administration, the count of U.S. initial claims for unemployment insurance is a leading economic indicator because it is an indication of emerging labor market conditions in the country. 

North Carolina initial claims 

While Georgia declined to continue providing Federally-funded unemployment benefits to its citizens, North Carolina has chosen to maintain the $300/week Federal payment in addition to the state’s $350/week maximum benefit. 

For the same time period, reflecting weeks ending June 26 to July 24, North Carolina saw a slight increase in the number of initial unemployment claims, from 4,879 in the week ending June 26 to 5,118 in the week ending July 31, a nearly 5 percent increase.

 North Carolina’s governor chose to veto a bill that would have ended the enhanced Federal benefit before its expiration date in early September. 

“Unemployment is declining with more people getting vaccinated and into the workforce as North Carolina has strengthened work search requirements for those receiving benefits. The federal help that this bill cuts off will only last a few more weeks and it supplements North Carolina’s state benefits, which are among the stingiest in the country. Prematurely stopping these benefits hurts our state by sending back money that could be injected into our economy with people using it for things like food and rent. I support strong efforts to make more quality childcare available and to provide businesses with funds for hiring bonuses and the bill falls short on both of these,” Gov. Cooper said. (WBTV

Continuing claims 

Both Georgia and North Carolina have seen a steady decrease in continued unemployment claims since early July. Georgia did see a 23 percent jump between the weeks ending June 19 and June 26, but since then continued claims have declined by 51 percent. Since the end of May, continued claims in Georgia have dropped by 40,855 (-31 percent). 

In North Carolina, there was no spike between June 19 and June 26. Since the end of May, continued claims in North Carolina have dropped by 9,648 (-21 percent). 

A person who has already filed an initial claim and who has experienced a week of unemployment then files a continued claim to claim benefits for that week of unemployment. On a weekly basis, continued claims are also referred to as insured unemployment, as continued claims reflect a good approximation of the current number of insured unemployed workers filing for UI benefits. 

The U.S. Labor Department’s Employment and Training Administration argues that a count of U.S. continued weeks claimed is also a good indicator of labor market conditions. While continued claims are not a leading indicator (they roughly coincide with economic cycles at their peaks and lag at cycle troughs), they provide confirming evidence of the direction of the U.S. economy. 

Conclusions 

While a longer pattern of weeks will provide a more complete picture, some preliminary judgments are possible. 

Initial unemployment claims in Georgia, which were already showing weekly declines before the week ending June 26, continued dropping until the week ending July 10. Those drops continued but accelerated after the week ending June 26 for a couple of weeks before leveling off at a point lower than during the 2020 Covid year but higher than in the pre-Covid summers of 2018 and 2019. 

It is impossible to say whether the weekly decline might have occurred even if the $300 payments had continued in Georgia, but the most recent weeks indicate that any incentive brought about by the $300 loss in benefits at the end of June appears to have been outweighed by other factors such as the number of job opportunities available that will utilize workers’ past experiences, employees’ reluctance to return to work in conditions that might expose them to Covid-19 and its variants, inability to find work at suitable pay levels, as well as other issues such as family responsibilities that require at-home attendance of relatives and children. 

Certainly the loss of $300/week weighed on unemployed workers personal budgets, whether it produced a dramatic longer-term rise in the availability of labor remains problematic.

Georgia Initial Claims Data 

Number of initial claims reflecting the week ending: 

5/22/2021    24,622

5/29/2021    22,240

6/05/2021    22,524

6/12/2021    20,698

6/19/2021    20.749

6/26/2021    19,761

7/03/2021    14,475

7/10/2021    12,605

7/17/2021    11,985

7/24/2021    12,666

 Source: U.S. Department of Labor, Employment and Training Administration

Thursday, July 22, 2021

Georgia unemployment continued claims surge and then drop 40% after state stops federal aid

Continued unemployment claims in Georgia surged in the week before Georgia eliminated the $300 per week federal supplement to state unemployment benefits and then declined by almost 40 percent in the week following the ending of the supplement.

The number of continued unemployment claims rose from 144,750 reflecting the week ending June 19 to 178,850 in the week ending June 26, before declining to 106,266 reflecting the week ending July 3, 2021. 

Continued claims, also referred to as insured unemployment, is the number of people who have already filed an initial claim and who have experienced a week of unemployment and then filed a continued claim to claim benefits for that week of unemployment. 

The number of initial unemployment claims after the ending of the supplement and reflecting the week ending July, 3, dropped 27 percent, from 19,761 in the prior week to 14,475. 

Georgia ended the federal supplement effective June 27 and also ended programs that paid unemployment benefits to people who had not been eligible for benefits and people who had been receiving benefits longer than allowed under state law. 

According to the Governor’s Office of Planning and Budget website, “In accordance with Governor Brian Kemp and Commissioner Mark Butler’s plan for reemployment and economic recovery, effective June 27, 2021, Georgia will no longer participate in the federal unemployment programs enacted through the CARES Act and the American Rescue Plan Act.” 

With the change, the maximum weekly benefit payable to eligible unemployed workers in Georgia dropped from $665 to $365. 

Nationally, the $300 weekly supplement is due to end September 6, 2021, and Georgia is one of a number of states that have chosen to end the supplement before the federal expiration date. 


Unemployment remains above 2018 and 2019 levels

While the number of continued unemployment claims in Georgia have fallen by more than 85 percent compared to a year ago, continued claims remain higher than for the same weeks in 2018 and 2019. 

Contrasted with the 108,266 continued claims for the week ending July 3, 2021, for the week ending July 4, 2018, continued claims totaled 32,731, and for the week ending July 6, 2019, continued claims were 30,818. 

For the first week of July in 2018 and 2019, the state’s insured unemployment rate was less than 0.8 percent. For the week ending July 3, 2021, the rate stood at 2.57 percent. A year ago, Georgia’s insured unemployment rate was 17.99 percent. 

The insured unemployment rate (percentage of covered employment) is Continued Claims (also called insured unemployment) divided by Covered Employment. This is different than the more normally cited unemployment rate, which is calculated regardless of whether individuals are receiving unemployment benefits.

State unemployment rules starting June 27, 2021 

The Georgia Department of Labor has announced that in accordance with the plan for reemployment and economic recovery, effective June 27, 2021, Georgia will no longer participate in the federal unemployment insurance (UI) programs enacted through the CARES Act and the American Rescue Plan Act: PUA, PEUC, FPUC and MEUC. This means the last payable week for these programs will be week ending June 26, 2021, even if there is a remaining balance. 

All eligible payments under any of these federal programs after the program ends will continue to be processed and issued to qualified individuals. This applies to individuals whose eligibility is later determined and unemployment benefits are payable for weeks ending on or before June 26, 2021. 

To be eligible for state Unemployment Insurance (UI), individuals must: 

  • Be unemployed through no fault of their own.
  • Be monetarily eligible (have enough wages from past employers to qualify).
  • Be able to work.
  • Be available for work.
  • Actively seek work.
  • Report your weekly work search.
  • Be registered with Employ Georgia.
  • Not refuse suitable work, if offered.

Georgia regulations allow claimants to receive up to 26 weeks of UI benefits. Eligible claimants will receive a weekly benefit amount ranging from $55 to $365 per week, based on their previous earnings.

Work search requirement reinstated Sunday, July 4, 2021

To continue to receive unemployment benefits workers are required to make a good faith effort to find another job as soon as possible. Unemployed workers can only be paid for weeks during which you actively seek work. Unless the Georgia Department of Labor (GDOL) specifically exempts an individual from this requirement, job seekers are required to make a minimum of three new reportable job contacts each week. These contacts must be with employers not previously contacted. Employer contacts can include those made in person, by telephone, online or by résumés faxed, mailed, or emailed. 

More information on filing for unemployment benefits in Georgia can be found at Unemployment Benefits | Georgia Department of Labor


Sunday, July 18, 2021

Georgia job recovery continues to show progress

 

Georgia nonfarm employment, seasonally adjusted

Georgia’s labor market showed progress in June and the state’s economy continued to recover, although still falling short of its pre-pandemic levels.

The state’s unemployment rate reached 4.0 percent, a level still 0.4 percentage points higher than its 3.6 percent rate recorded in March 2020. Similarly, the number of unemployed in the state dropped by 5,005 to 208,033, after seasonal adjustment. This compared to 186,995 in March 2020.

Georgia added 32,800 nonfarm jobs in June, after seasonal adjustment, the largest one-month increase since August 2020.

The Atlanta metro area accounted for all of the net increase in jobs, adding 39,000 over the month. The Atlanta area has consistently accounted for 61 percent of the state’s labor market over the past two years.

With the June job figures, Georgia employment sits now at 4,521,000, 116,000 jobs fewer than in March 2020.

At 2,781,600, the Atlanta area job market is still short 82,700 jobs from the level it obtained in March 2020.

2nd Quarter 2021

In the three months (April to June), Georgia 38,100 jobs, after seasonal adjustment, compared to a gain of 33,100 jobs in the first quarter of the year. As a comparison, in the second quarter of 2019, the state added 13,700 jobs, while in the second quarter of 2020, the state lost 340,800 jobs as pandemic-related closures and business drop-offs impacted the state’s economy.

The Atlanta metro area added 44,100 jobs in the second quarter of 2021, compared to 9,300 in the second quarter of 2019, and a loss of 239,200 jobs in the second quarter of 2020.

All information has been seasonally adjusted, provided by the U.S. Bureau of Labor Statistics, and is subject to revision.

End of pandemic-related unemployment benefits

The State of Georgia chose to end Federal pandemic unemployment benefits on June 26, 2021. This meant a loss of $300 to individuals receiving weekly unemployment benefits.

The Georgia Department of Labor has reinstated eligibility requirements for both claimants and employers that were waived during the pandemic.

As part of the change, employers will again be charged for unemployment benefits for those temporarily laid off or working few hours during the pandemic. It is anticipated that employers may become more aggressive in contesting former employees who apply for unemployment benefits.

The July unemployment figures will be watched closely to see what effect the decrease in weekly benefits will have on individuals seeking work.