Georgia employment stagnates in October; over-the-year growth continues to look good

Recently the Federal Reserve Bank of Atlanta put out a blog titled “Giving Thanks for Faster Payroll Growth” that noted last month, the Southeast gained more payrolls (67,700) than any other month since May 2010.

They failed to note, although they could have mentioned, that none of this growth was attributable to Georgia, which recorded a loss of 1,400 jobs over the month (seasonally adjusted).

While the actual number of people on nonfarm payrolls grew by 22,700 in the month of October, the seasonal adjustment factors turned this into a loss. In any case, the Bureau of Labor Statistics noted in its monthly report that the change in job numbers was not statistically significant, so statistically we can say that Georgia stood still in October.

Over the year however, the picture is brighter with the state having added 85,800 jobs since October 2012, for a job growth rate of 2.2 percent. Georgia began its recovery later than the nation and recovered at a slower pace until the end of 2012 when the state began growing faster than the nation.

12-Month Percentage Change (seasonally adjusted)

Month	United States	Georgia	Atlanta MSA
October 2012	1.6	1.5	2.0
November 2012	1.7	1.6	2.3
December 2012	1.7	1.8	2.4
January 2013	1.5	1.8	2.6
February 2013	1.6	1.8	2.2
March 2013	1.5	1.9	2.4
April 2013	1.6	1.7	2.0
May 2013	1.6	1.8	2.1
June 2013	1.7	1.9	2.3
July 2013	1.6	2.8	3.2
August 2013	1.7	2.4	2.7
September 2013	1.7(p)	2.9	3.1
October 2013	1.7(p)	2.2(p)	2.7(p)

(p) Preliminary

Business and Professional Services, which continues to be an important driver in the state’s job growth, loss 3,700 jobs in October. Along with a loss of 3,400 jobs in local governments were the main contributors to the stagnant job picture for the state.

Over the year, Business and Professional Services has been a significant contributor to the state as the sector added 30,600 jobs resulting in growth rate of 5.4 percent, the fastest growth rate of any sector.

Similarly, over the year, Leisure and Hospitality Services has grown by 5 percent, although from a lower base, resulting in an addition of 19,900 jobs.

Government continues to be drag on job growth, dropping 8,000 jobs over the year, or minus 1.2 percent. In Georgia, Federal employment declined by 4,900 jobs while state and local government failed to pick up the slack by also declining by 1,900 and 1,200 jobs respectively.

Atlanta MSA

For the Atlanta area, employment has outpaced the state after looking earlier as if it were lagging. In October, the MSA added 6,100 jobs (seasonally adjusted) and has added 63,600 over the 12 months ending in October 2013.

As a percent of the state’s job market, the Atlanta MSA has increased its share slightly rising from 59.5 percent of all nonfarm jobs in October 2012 to 59.8 percent in October 2013.

Building new Stadiums for Atlanta Braves and Falcons – Construction Boom

Today’s announcement that the Atlanta Braves will be building a new stadium in the Atlanta suburb of Cobb County follows the plan by the Atlanta Falcons to have a new stadium constructed near the site of their present stadium in downtown Atlanta.

Combined, these two building projects, both expected to be completed by 2017, means a good boost to construction jobs in the state.

As of August 2013 (the most recent data available), Georgia had 148,300 construction-related jobs with 96,100 of them located in the Atlanta metro area. While both numbers are up from comparable periods a year ago, the state is still down more than 25 percent from construction employment prior to the recession.

The combination of the two new building projects will give a needed boost to the state’s economy with the usual spin-off of construction-related materials and supplies needed to build the two stadiums and associated construction (parking lots, etc.).

Although infrastructure spending can be controversial in the Atlanta area, the stadiums are one type of infrastructure improvement that will be welcomed by many in the metro area. It encourages investment that might not have been made otherwise. 

While there are many questions among economists on whether such construction provides an net benefits, there should be no question that the short-term boost will help the metro area, which is still struggling to find its way out of the recession and will help an industry hit hard by the downturn in housing.

Some will argue that the investment in these two projects would have greater benefits if invested elsewhere, but that supposes that the money and people would invest in other projects. 

Economists like to talk about a rational "menu" of possible investments and weigh the advantages and disadvantages of each, but this presupposes that the investors are neutral in their decision making and consideration of investment alternatives.

More likely, if the funding was not going to these two projects, it is unlikely it would have gone to alternative investments in the area, so these two investments represent dollars that would not have been spent to the benefit of the Atlanta metro area, if not on these specific projects. 

In the best of all worlds, this short-term boost will bridge the gap until housing picks up over the next couple of years, barring another recession. That is good news for those in the construction trade, and for the state's economy as a whole.

Email michaelwald50@gmail.com