Friday, December 1, 2017

Federal Reserve finds modest economic improvement in Georgia and other Southeast states

On November 29, 2017, the Federal Reserve published its latest edition of the Beige Book. The report is published eight times per year and summarizes anecdotal information on current economic conditions in the Federal Reserve’s 12 Districts gathered through reports from Bank and Branch directors and interviews with key business contacts, economists, market experts, and other sources.

Below are excerpts from the Sixth Federal Reserve District’s report, which includes Alabama, Florida, and Georgia, and portions of Louisiana, Mississippi, and Tennessee, followed by a summary for the Fifth Federal Reserve District. For purposes of this story, I have italicized direct quotes from the report.

In summary, the Sixth District reported that economic conditions modestly improved since the previous report. Tightness in the labor market persisted and wages grew modestly. Non-labor costs remained little changed. Retail sales increased across most of the District. Tourism activity was mostly positive. Home sales were flat to down, and home prices improved slightly. Manufacturers indicated that activity modestly increased. Credit was available.

For the nation as a whole, the Bank reports that economic activity continued to increase at a modest to moderate pace in October and mid-November, according to anecdotal reports from contacts across the 12 Federal Reserve Districts. There was a slight improvement in the outlook among contacts in reporting Districts.

Conditions in the Southeast (Sixth District) 

Most businesses continue to expect slow and steady growth for the remainder of the year. District firms continued to describe a tight labor market as many faced difficulty [sic] finding workers. Wage growth remained modest. On balance, nonlabor input costs were stable. Retail sales, including auto, increased across most of the District. Reports from the hospitality sector were mostly positive. Residential real estate contacts noted that home sales were flat to down, although home prices improved modestly from the previous report. Commercial real estate contacts continued to report that the pace of construction had picked up from a year ago. Manufacturers indicated that activity grew at a modest pace since the previous report. Bankers reported that ample credit was available.

In a survey of business contacts, most respondents indicated that they planned to increase employment over the next 12 months as a result of expected sales growth, a need for skills not possessed by current staff, and to mitigate concerns about current staff being overworked. The top factors restraining hiring plans were challenges finding workers with required skills and a desire to keep operating costs low. Amidst these challenges, in an effort to attract workers, most respondents reported that they raised wages, signing bonuses, or total compensation offered.

Georgia and Louisiana contacts reported continued growth in business, leisure, and group travel.

Banking and Finance
Credit remained readily available for most qualified borrowers, although some contacts faced challenges obtaining financing for long-term residential developments. Credit tightened somewhat for energy-related industries. Liquidity was plentiful, but some banking contacts reported pressure to increase deposit rates. Some bankers noted increased competition for loans.

Overall, energy contacts reported a steady pace of activity. They noted that the new natural gas pipeline capacity that came online was facilitating the demand for export of liquid natural gas. Both crude oil and gasoline inventories continued to decrease; however, levels were higher than the average range. Contacts reported that industrial and commercial utility usage remained flat. Broadly, utility contacts indicated they are preparing for a colder winter than the previous year.

Conditions in other southeastern states (Fifth District) 

Not all southeastern states are located in the Federal Reserve’s Sixth District. The Fifth District includes the states of Maryland, Virginia, North Carolina, and South Carolina; 49 counties constituting most of West Virginia; and the District of Columbia.

Summary of Economic Activity in the Fifth District

The Fifth District economy grew at a moderate rate since our last Beige Book report. Manufacturers noted a moderate rise in new orders and shipments, and they generally expected strong growth over the next six months. District ports continued to see high volumes, particularly for imports. Trucking firms reported robust growth, in part due to relief shipments being sent to hurricane-affected areas. Retailers were optimistic ahead of the holiday shopping season. Tourism remained robust as mild weather helped boost activity. Residential home sales rose modestly and the inventory of houses for sale remained low. Commercial real estate leasing increased moderately. Residential loan demand was little changed in recent weeks, while commercial, small business, and agriculture lending picked up. Nonfinancial services firms reported moderate revenue growth. The demand for labor increased moderately in recent weeks while wage increases remained modest. Prices continued to grow at a modest pace.

Banking and Finance
On the whole, loan demand increased modestly since our previous report. Residential mortgage demand was generally characterized as stable. A lender in Virginia reported an increase in mortgage loans, but attributed it to more advertising and concessions on closing costs. Meanwhile, a banker in North Carolina said the low inventory of homes for sale was restraining mortgage loan growth. Commercial lending activity rose moderately in recent weeks. A banker in Baltimore saw an increase in commercial real estate lending for multi-family and senior housing facilities. Small business and agriculture lending rose modestly, according to contacts in Virginia and North Carolina. On balance, interest rates and net interest margins increased slightly in recent weeks. Credit quality remained strong while credit standards were generally unchanged.

The Beige Book is a summary of interviews conducted with business contacts before each meeting of the Fed's monetary policymaking Federal Open Market Committee (FOMC). The next FOMC meeting will be held December 12 and 13.

Monday, October 23, 2017

Tropical storm Irma had minimal effect on Georgia’s employment and that is worrying

Georgia nonfarm employment, Jan-Sep 2017, in thousands, seasonally adjusted

Nobody was surprised when Georgia’s employment numbers for September showed a 500-job loss, after seasonal adjustment. Most blamed it on Irma, which hit Florida as a hurricane and was downgraded to a tropical storm by the time it came through Georgia.

State Labor Commissioner Mark Butler told WUGA that the storm caused Georgia’s job numbers to fall and unemployment claims to rise in September. Butler said a 240 percent jump for the month in the coastal region drove the state’s numbers to some degree.

“It wasn’t because of some kind of economic issue that happened where there was some problem with the economy,” according to Butler. “Most of what we saw with the jobs and initial claims has to do with the storm.”

It is true that the largest disruptions occurred in the Savannah area, which experienced a mandatory evacuation although the storm itself failed to seriously impact the coastal area.

If the job losses were storm-related, then temporary and contract employment should have shown the greatest losses. These jobs lack the security of regular employment and so are the most likely to be impacted when businesses suddenly stop operations even for a few days.

Unfortunately, in September, employment services in the state actually gained 5,300 jobs in September, before seasonal adjustment. That is above the 4,600 jobs gained in September 2016 when there was no storm.

Job losses concentrated in three industries partially offset by gains in two others

Georgia’s job losses in September were concentrated in three key industries: construction, manufacturing, and retail trade.

Construction jobs fell by 3,600 over the month, followed by a 2,900 job decline in retail trade and a 2,800 job drop in manufacturing.

The reason overall losses were not larger can be attributed to gains in education and health services (+4,200) and leisure and hospitality (+2,800).

Again, if the tropical storm had caused significant job losses, leisure and hospitality would have been one of the key industries to suffer.

It is possible some construction jobs were lost due to the inclement weather, but even if they were, that would not explain the loss of manufacturing or retail jobs in September.

On the other hand, manufacturing might represent not a loss of manufacturing activity, but a decreased need to hire more people as automation takes on a larger role in the manufacturing process.

For retail, job losses might reflect the increasing effect of the internet and online purchasing. Retailers are being cautious as they see online sales rise.

Looking ahead to Christmas, there is sure to be seasonal hiring in the months of October and November, but it is possible to see a continued decline in retail jobs after the first of the year.

One month does not make a trend

Monthly numbers are subject to wide variations month-to-month, despite the Bureau of Labor Statistics’s attempts smooth out the changes using seasonal adjustment factors.

It is too soon to say whether the losses in September represent something significant, but it is worth watching future months.

Expect to see some job pick-up in construction from storm-related repairs, and a boost in October before settling down to more usual numbers in November. 

Then we will be able to see if September was a fluke or the beginning of a trend.

Thursday, October 5, 2017

Georgia’s energy future becomes less clear after 2018

Georgia Power has had a rough couple of months dealing with the aftermath of Tropical Storm Irma and the Westinghouse bankruptcy, which placed the construction of the nuclear project at Plant Vogtle in jeopardy.

One source of support they could count on was the Georgia Public Service Commission that has consistently approved Georgia Power’s plans to continue construction of the Plant Vogtle Units 3 & 4.

This support has remained steadfast even as a similar nuclear project in South Carolina was abandoned, and neighboring utilities Duke Energy and NextEra Energy (Florida Power & Light) stepped back from plans to build future nuclear reactors.

With the upcoming election of two Georgia Public Service commissioners in 2018, that level of support is less clear.

Changes to the Georgia Public Service Commission

Stan Wise, District 5 Commissioner and Chairman of the Georgia Public Service Commission, has announced that he does not intend to seek re-election in 2018, putting that open seat up for grabs in November 2018.

Georgia’s five Public Service Commissioners serve six-year staggered terms.

In 2018, commissioner seats in Districts 3 & 5 will be up for election, and voters in those two districts will have the opportunity to express their views on Georgia Power and how Georgia’s energy future shall proceed.

District 3 includes core Atlanta urban counties including Fulton, DeKalb, Clayton, and Rockdale. Currently, District 3 is represented by Chuck Eaton, a Republican who first won election in 2006.

District 5 includes counties to the west and south of Atlanta including Cobb, Coweta, Fayette, Henry, and 16 other counties.

District 5 Commissioner Stan Wise has been a consistent advocate for Plant Vogtle and for Georgia Power.  By not standing for re-election, Mr. Wise will be able to vote on issues between now and the end of 2018 without considering how his votes will affect his standing with the voters.

It gives him tremendous freedom over the next 15 months but it also removes him from crucial decisions that the PSC will be taking in 2019 and beyond.

In addition, District 4 Commissioner, Lauren “Bubba” McDonald, while consistently voting with the other commissioners, has called for an ending to Georgia Power collecting surcharges that are part of ratepayers bills for two nuclear plant units that have not yet begun operation.

If there are significant changes in the incumbents of Districts 3 & 5 come 2019, there might be new majorities formed on a number of issues, only one of which is Plant Vogtle.

Looking to 2019 and beyond

In 2016, Georgia Power and the Georgia PSC agreed that the company's next base electric rate case should be postponed until July 2019.

According to Georgia, Power, the company's last base electric rate case in 2013 incorporated the costs of investments in infrastructure required in order to maintain high levels of reliability and superior customer service.

In 2016, the extent of cost overruns and delays in the construction of Plant Vogtle Units 3 & 4 were less known to the public.

Georgia Power was reporting continued progress in the construction of the two units and gave no hint of the problems coming in 2017.

Since then, Georgia Power’s problems have become more apparent and more public.

Rating agencies are considering lowering their rates for the company’s bonds, and investors are taking note of Georgia Power’s decision to move forward with a technology that is becoming less cost effective as natural gas prices drop and alternative energy sources become more viable.

As a result, the base electric rate case in 2019 may be more contentious than in the past.

For Georgia Power, which has always had excellent relations with the political powers in the state, the next two years will be a test of its political skill.

Tuesday, September 19, 2017

Equifax CEO speaks prior to announcement of data breach

On September 7, 2017, Atlanta-based Equifax announced that personal information for as many as 143 million consumers had been accessed by hackers between May and July.

Back on August 17, after the breach was known to the company, but before the information was released publicly, Equifax CEO Rick Smith spoke to a group at the University of Georgia, Terry College of Business.

Early in his talk he boasts about he "transformed" the company from one that "didn't have any innovation" with "average talent", which he changed into a "global data and analytics company" by "innovating at a faster rate."

He gave this talk knowing about the data breach.

Below you can watch his entire talk.

Since the breach has been made public, Equifax's stock price has fallen about 35%.

Equifax is a major company in the Atlanta metro area, important not for its size, but because it supports many groups and institutions in Georgia since its headquarters is in Atlanta.

If the company is bought out, Atlanta will lose a major headquarters company, and many groups in Georgia will have less access to the corporate support for their activities now provided by Equifax.

Sunday, September 17, 2017

Georgia’s employment picture rebounds in August

Georgia's jobs picture remains positive

Georgia added 19.800 jobs in August, reversing its decline in July according to newly released seasonally adjusted information from the U.S. Bureau of Labor Statistics.

Just as important as the August gain, BLS revised the state’s job loss in July. Originally reported as a loss of 14,100 jobs over the month, the revision brings the job loss to only 3,500 jobs.

For the 12 months ending in August, Georgia has added 116,500 jobs. The state’s 12-month job creation rate has continually exceeded 100,000 jobs since early 2014.

With the August figures, the state now is home to more than 4.5 million nonfarm jobs, a new state record.

Georgia’s unemployment rate in August remained at 4.7%, the same as in July.

Revisions to July data were anticipated

Revisions to July’s employment numbers were anticipated, as the preliminary figures saw the state losing jobs even as the national employment numbers were improving.

This month, the revisions mean that Georgia showed remarkable growth while employment slowed nationwide.

Nationally, the U.S. economy added 156,000 jobs in August down from a revised 189,000 jobs increase in July. BLS revised downward its employment counts for June and July even as it revised Georgia’s jobs report upward.

Growth by sector

For August, employment in the private sector grew by 15,500, while government increased 4,300 jobs.

The most significant change was in professional and business services, which added 10,200 jobs in August. Manufacturing added 4,100 jobs after showing declines over the previous three months. Retail trade added 1,500 jobs, financial activities employment increased by 1,000.

All the growth in the government sector can be attributed to local governments, whose employment rose by 4,600, offsetting a small decline in state government employment.

Data for selected states

Like Georgia, Florida reported good job creation in August, up by 20,100 jobs after seasonal adjustment. South Carolina’s employment rose by 6,200 while Alabama’s job totals declined by 2,900. Mississippi showed no change over the month.

Pre-hurricane employment data

August represents the last employment data prior to the landfall of Hurricanes Harvey and Irma. BLS reports that Hurricane Harvey had no discernible effect on the employment and unemployment data for August.

Data for September and onward will be impacted by the two storms, which both disrupted normal operations in several states including Texas and Florida, and also disrupted data collection making it more difficult to obtain accurate reporting of employment information.

Even in Georgia, Tropical Storm Irma caused disruption including the partial evacuation of Savannah and a halt to port activities in that area.

The disruptions will cause data for the next few months to be suspect and prone to possible large revisions making the true employment trend more difficult to discern.

Thursday, August 31, 2017

Georgia AFL-CIO supports continuation of Plant Vogtle Project; AFL-CIO announces link to donate for relief efforts in Texas

Georgia AFL-CIO President, Charlie Flemming, issued the following announcement on August 31, 2017:

The Georgia AFL-CIO fully supports Georgia Power and its decision to complete the Vogtle project. The completion of this multi-billion-dollar investment means the 4,500 highly skilled craft members of the North America Building Trades will continue to stay on the job.

“As the President of the Georgia AFL-CIO, representing 210,000 union members and retirees in the state. I commend Georgia Power and their partners for the decision to recommend of the Plant Vogtle nuclear project. Not only will it deliver clean and reliable energy to millions of Georgians, it will provide thousands of good quality, family-wage jobs. The plant will serve the clean energy and economic needs of the state for decades to come.”  said Charlie Flemming, President of the Georgia AFL-CIO.

Completing the Vogtle project will allow the Southern Company to continue to diversify its electricity portfolio, save thousands of family sustaining jobs and continue to grow the regional economy. We support this decision to continue the project.

Support for relief efforts in Texas

In other labor-related news, the AFL-CIO has announced that the Texas AFL-CIO has activated a link to donate to the Texas Workers Relief Fund, a 501(c)(3) charitable organization that helps affiliated workers in the aftermath of disasters. The link is

Saturday, August 26, 2017

Plant Vogtle problems affecting Georgia’s EMCs through Oglethorpe Power

Higher electricity costs due to Plant Vogtle Units 3 & 4 will affect Georgia’s EMCs as well as Georgia Power customers.

Map of Georgia Electric Membership Corporations

The role of Georgia Electric Membership Corporations (EMCs) has been overlooked in the discussions on cost overruns and possible abandonment of Plant Vogtle Units 3 & 4.

EMC customers may be under the mistaken impression that if the Southern Company decides to go ahead with construction of Units 3 & 4, and the Georgia Public Service Commission approves, that any increases in electricity costs will be borne only by Georgia Power customers.

This is incorrect. EMC customers will also have to bare part of the burden of higher electricity costs.

Confusion on this point may help explain why EMC customers have been less vocal in opposition to the rate increases – they simply are unaware that their electricity costs will rise along with those of Georgia Power Customers.

In the case of the EMCs, increased costs to Oglethorpe Power will be passed along to the EMCs in the form of higher wholesale electricity prices, which the EMCs will pass along to their customers.

Last week, Oglethorpe Power Co., which owns 30% of the Vogtle nuclear plant, requested $1.6 billion in additional support from the Department of Energy, E&E News reports

Oglethorpe Power Corporation, which supplies wholesale electric power and is owned by 38 of the state’s 41 EMCs, has kept a low profile, allowing Southern Company to take the lead.

Nearly half of all Georgia residents receive their electric service from EMCs, according to Oglethorpe Power.

Georgia Power will file its next report on August 31. 

Member Systems

Friday, August 18, 2017

Georgia surprises with job losses in July

In his monthly YouTube report, Georgia Labor Commissioner Mark Butler puts a positive spin on this month's job losses.

Georgia lost 14,100 jobs in the month of July, the largest one-month job loss for the state since the beginning of 2011. With that lost, Georgia’s 12-month job gain of 96,200 jobs after seasonal adjustment, marked the first time since 2014 that the state has posted annual growth of less than 100,000 jobs in a year.

Despite the jobs drop, the state’s unemployment rate was essentially unchanged at 4.7%, which the Bureau of Labor statistics calculated as statistically not significantly different than the nation’s rate at 4.3%. Because Georgia has a smaller labor force than the nation and the unemployment rate is based on a smaller sample, apparent differences in rates can be deceiving once the numbers are adjusted by sampling techniques.

Private Sector Job Loss is Key

Over the month, the private sector in Georgia recorded losses of 11,900 jobs before seasonal adjustment. To compare, you have to go back to 2009 to see a July where the state lost this numbers of private sector jobs.

In July, local government educational services showed a drop of 19,700 jobs, about average for this month of the year.

Normally, in July, growth in private sector jobs in Georgia offset seasonal losses in local government education jobs, as school-related workers, such as bus drivers and cafeteria workers, are unemployed while the schools are on summer recess with the expectation that these jobs will begin again once schools open in August.

This year, the private sector was unable to make up the difference.

Losses were widespread with construction (-1,900), manufacturing (-1,600), retail trade (-1,300), and professional and business services (-3,600) all contributing to the downturn.

Georgia’s job loss runs counter to the nation

Georgia’s losses are more surprising since the nation reported good job growth in July, up by 209,000, after seasonal adjustment.

Among the states, the largest increase in employment over the month occurred in California (+82,600), followed by Florida (+32,700) and Pennsylvania (+29,000).

In percentage terms, the largest increases occurred in the District of Columbia, Idaho, Oklahoma, and Rhode Island (+0.6 percent each).

Georgia had the only significant employment decrease (-14,100, or -0.3 percent).

Twenty-nine states and the District of Columbia had over-the-year increases in nonfarm payroll employment in July. The largest job gains occurred in Texas (+293,400), California (+276,400), and Florida (+226,200).

It is always interesting to see the monthly revisions to these preliminary numbers, but next month economists will be looking closely to see if this month's drastic drop was simply a statistical slip, or the real start of a downturn.

Wednesday, August 16, 2017

The Georgia State AFL-CIO Condemns the Domestic Terrorism and Hatred in Charlottesville, Virginia.

By Charlie Flemming, August 15 - 2:11 pm

"Over the weekend in Charlottesville, Virginia, the nation and the world witnessed the hateful views and terrorist acts committed by white supremacists and neo-Nazis. This racism and bigotry has no place in America. In this country, we have always fought, in solidarity, for equality and justice and against these and other diabolical prejudices.

This is the time for leadership. Our leaders, both in DC and under the Gold Dome, must acknowledge this for what it is: domestic terrorism rooted in bigotry.

The hearts and prayers of Georgia’s Labor Movement are with all the victims, but especially the families of those who lost their lives: Heather Heyer and state Troopers Lieutenant H. Jay Cullen and Trooper-Pilot Berke M.M. Bates.  We pray for everyone’s safety. The labor movement condemns this domestic terrorism and remains committed to eradicating the despicable causes of hatred and intolerance.

If you would like to learn more about everything that happened in Charlottesville this weekend, please read more in this Washington Post article."

Thursday, August 10, 2017

Is this the future for construction workers at Plant Vogtle? Lessons from South Carolina

Plant Vogtle units 3 & 4 under construction

When the decision was made to stop work on the two nuclear power plants in South Carolina, construction workers didn’t receive much notice of layoff, according to the following report first published in the Pittsburgh Post-Gazette. This may be the future for Plant Vogtle workers building Units 3 & 4 if Southern Company decides to end work on the costly and long-delayed project.

Westinghouse: Project canceled 'without warning' By Anya Litvak / Pittsburgh Post-Gazette

A week after efforts to build two Westinghouse power plants came to a screeching halt in South Carolina, the Cranberry-based nuclear firm chronicled the shock of the moment and began dealing with the aftershocks.

About 6,000 people worked at the V.C. Summer site where two utilities, SCG&E and Santee Cooper, had commissioned Westinghouse Electric Co. to build two AP1000 power plants nine years ago.

Westinghouse had hundreds of its own employees at the site last week when the South Carolina utilities decided to stop the construction project that already was years behind schedule and billions of dollars over budget. The decision stemmed in large part from Westinghouse’s March 29 bankruptcy, the utilities said. 

But their move came “without warning,” Westinghouse said in a document filed with the bankruptcy court Monday.

The project owners did not give Westinghouse any notice before dismissing its subcontractors and vendors on the job, telling them to “halt all shipments and suspend or demobilize all work in progress,” the nuclear company said.

The utilities also restricted Westinghouse’s access to the project, the company said, “escorting its employees off the site using armed personnel, and subsequently only allowing entry to a handful of Westinghouse’s representatives and subcontractors, preventing Westinghouse from generally accessing the site” and carrying out its responsibilities.

The same was true for other workers like Kenneth Blind, a nuclear construction technician with Fluor Corp., the Texas-based firm that Westinghouse brought in in late 2015 to get the troubled construction work back on track.

Mr. Blind echoed Westinghouse’s account of what it was like on the day the project was canceled.

He found it strange that the Friday before the dismissals craft workers suddenly were told to hand in their work packages — binders with work instructions necessary to do their jobs, he said.

But the day before, Scana Corp., which owns part of the VC Summer project, had announced that Westinghouse’s parent company Toshiba Corp. had agreed to a $2.2 billion guarantee for the power plants. Mr. Blind took that as a good sign.

So did Westinghouse, which wrote in its bankruptcy filing on Monday that negotiating Toshiba’s commitment sent the message of wanting the projects to continue.

On the morning of July 31, things at V.C. Summer continued as usual. Mr. Blind’s team was starting to pour concrete for one of the buildings near the reactor. Around 11 a.m., a security guard approached him and asked if he would be sent home, too.

Too? Mr. Blind asked.

He went to find his boss, who then called his boss — a scene that was playing out across the huge site where thousands of workers were grasping at rumors. Word of armed guards had started to spread.

At an “all-hands meeting” at 2 p.m., they were told it was their last day on the job and thanked for their contribution to the project, Mr. Blind said.

People were angry, he recalled, and some were crying.

They began hustling to collect their stuff. “If you couldn't fit it through the turnstiles, you just had to leave it,” he said.

Now begins the work of “demobilizing” and “stabilizing” the site, Westinghouse said, vowing in a court document to seek payment from the South Carolina utilities for its part of the winding down process.

On Monday, Westinghouse also asked the court to allow it to break thousands of contracts associated with the V.C. Summer project. The contracts cover everything from engineering services and security protection to scaffolding and urine testing.

Had the project owners negotiated with Westinghouse to take over control of the power plant construction, as Southern Co. did with the Vogtle project in Georgia, these contracts would have likely changed hands from Westinghouse to the South Carolina utilities.

Now, they will join the long march of unsecured creditors in Westinghouse’s mammoth bankruptcy.

Anya Litvak: or 412-263-1455.

Tuesday, August 1, 2017

Plant Vogtle workers feeling pressure from South Carolina shutdown

VC Summer Nuclear Station, South Carolina

With South Carolina’s decision to end construction of its nuclear power plants, the pressure intensifies on the workers building Plant Vogtle’s two new nuclear plants.

The decision by Santee Cooper and SCE&G to call it quits on the VC Summer units leaves thousands of skilled workers unemployed.

Nearly 5,000 people lost their contracting jobs at the V.C. Summer Nuclear Plant on Monday afternoon as SCE&G and Santee Cooper announced that they are abandoning the construction of two nuclear reactors at the plant. Many employees got word of the massive layoffs just before lunch, according to WLTX in Columbia, S.C.

With no other nuclear facilities being constructed in the U.S. except for Plant Vogtle, this leaves thousands of skilled construction workers with no choice but to search out work elsewhere including in Georgia.

In a best-case scenario for workers at Plant Vogtle, you have a skilled construction workforce from South Carolina available to shift over to Plant Vogtle creating competition for jobs at the Georgia site. And that is the best-case scenario.

The worse-case scenario for the nearly 6,000 construction workers at Plant Vogtle is that the Southern Company decides to abandon its nuclear construction project as well.

Like VC Summer, Plant Vogtle is billions of dollars over budget and years behind schedule. So far, only approximately one-third of the construction project has been completed.

Nuclear Watch South and Concerned Ratepayers of Georgia have told the Georgia Public Service Commission that in their opinion, energy usage in the state is not growing and the nuclear plants are not needed.

For South Carolina, the decision comes after SCE&G and Santee Cooper have spent about $9 billion on a project that analysts said could have ultimately cost more than $23 billion, more than twice the original price tag. Under a state law passed 10 years ago, SCE&G was allowed to charge customers for the work before the reactors were finished. About 18 percent of an SCE&G customer’s bill goes for the nuclear project, according to The State newspaper.

Whether Southern Company decides to continue construction or not, workers building the two nuclear reactors at Plant Vogtle find themselves tonight with a very unsettled future. 

Friday, July 28, 2017

No sign of wage inflation as labor costs remain low

Wage inflation remains low
Employers continue to have the upper hand in controlling labor costs, as the government’s broadest gauge showed that private industry wages and salaries have increased only 2.4% and costs for benefits have risen only 2.2% over the past year.

While job growth continues to be strong and the unemployment rate falls, employers continue to find workers without having to steeply increase pay rates or provide more expensive benefits to attract and retain their employees.

Gains in wages actually slowed in the second quarter of 2017 with the Employment Cost Index’s quarterly report on private industry wages and salaries recording a seasonally adjusted increase in June of 0.5% as compared to a 0.9% increase for the first quarter of the year.

Benefit costs rose by 0.6% over the three months ending in June, the same percentage increase recorded for the previous quarter.

For workers in the South, private industry wages rose at a slower pace than for the nation as a whole, increasing 1.7% for the 12 months ending in June.

In comparison, the Consumer Price Index for All Urban Consumers (CPI-U) has risen 1.6% for the U.S. and 1.5% for the South Region in the 12 months ending in June.

As a result, the costs for employing workers continues to rise faster than the overall inflation rate, although the rate of increase for labor costs remain subdued.

Some economists believe that without a substantial increase in wage inflation resulting in larger take-home pay for workers, overall inflation will remain below the Federal Reserve’s target of 2%.

Wednesday, July 26, 2017

Georgia’s economy grows faster than U.S. and Southeast in the first quarter of 2017

Real gross domestic product (GDP) in Georgia increased at an annual rate of 1.7% in the first quarter of 2017, according to newly released information from the U.S. Bureau of Economic Analysis (BEA).

The increase was greater than for the U.S. (1.2%) and the Southeast (1.5%).

Gross domestic product (GDP) by state is the market value of goods and services produced by the labor and property located in a state. The U.S. values may differ from the values in the national income and product accounts (NIPAs) because the GDP by state accounts exclude federal military and civilian activity located overseas (because these activities cannot be attributed to a particular state).

For Georgia, the increase in the first quarter of 2017 compares to a 1.8% increase in the fourth quarter of 2016 and a 6.5% increase in the first quarter of 2016.

Georgia’s GDP in the first quarter of 2017 was $537,264,000,000 (seasonally adjusted at annual rates).

The state contributed 2.8% of the nation’s total GDP in the first quarter, slightly down from its 2.9% contribution in the first quarter of 2016.

Georgia Growth Industries

Industries in Georgia recording the greatest annualized growth rates in the first quarter of 2017 included Wholesale Trade (0.36%); Government (0.28%); Nondurable-goods Manufacturing (0.25%); Construction (0.23%); and Agriculture, Forestry, Fishing, and Hunting (0.19%).

Industries that subtracted from real growth in the first quarter of 2017 included Utilities (-0.15%) and Retail Trade (-0.14%).  

Southeastern State GDP

States in the Southeast with higher rates of growth than Georgia included West Virginia (3.0%), Virginia (2.0%), Alabama (1.9%) and Kentucky (1.8%).

In the Southeast, North Carolina recorded the lowest annualized real growth rate in the first quarter of 2017, rising by only 0.7%.

Nationally, real GDP by state in the first quarter ranged from 3.9 percent in Texas to –4.0 percent in Nebraska.

National GDP

For the nation as a whole, industries showing the greatest annual rate of increase in the first quarter included Real Estate and Rental and Leasing (0.35%), Mining (0.32%), Durable Goods Manufacturing (0.29%), and Nondurable-goods Manufacturing (0.26%).

GDP by state is the state counterpart of the Nation's GDP, the Bureau's featured and most comprehensive measure of U.S. economic activity.

Current-dollar statistics are valued in the prices of the period when the transactions occurred—that is, at “market value.” Also referred to as “nominal GDP” or “current-price GDP.” Real values are inflation-adjusted statistics—that is, these exclude the effects of price changes. 

Friday, July 21, 2017

Metro Atlanta’s job growth drives Georgia’s growth

After two months of small declines, Georgia’s employers rebounded sharply in June, adding 27,400 jobs over the month according to newly released data from the U.S. Bureau of Labor Statistics. It was the largest one-month jump in hiring in over six years.

The new jobs added in June pushed the total number of jobs added over the past year to 122,600, well above the 111,200 jobs added for the same period in 2016.

The state’s unemployment rate relatively unchanged at 4.8% in June compared to May. In June 2016, the state’s unemployment rate stood at 5.3%.

Over the past year, Georgia’s labor force grew by 134,941 persons as the number of people employed in Georgia rose by 153,335 while the number counted as unemployed dropped by 18,394.

Metro Atlanta

The metro Atlanta area added 23,900 in June and accounted for 87% of the state’s new jobs. Over the past year, metro area employers have added 93,700 jobs.  

Increasingly, the metro Atlanta area drives the state’s job market.

At the beginning of 2007, metro Atlanta accounted for 58.9% of the state’s employment. With the new counts for June, that percentage has risen to 61.3%.

Signs of Wage Inflation

With Georgia’s job growth coming in at 2.8% over the year compared to the nation’s 1.6% growth rate, pressures are rising on employers to raise compensation to retain and attract workers.

Earlier in the week, the Bureau of Labor Statistics released a report detailing weekly earnings for full-time wage and salary workers for the second quarter of 2017.

The median weekly earnings of the nation's 113.4 million full-time wage and salary workers
were $859 in the second quarter of 2017 (not seasonally adjusted).

This was 4.2 percent higher than a year earlier, compared with a gain of 1.9 percent in the Consumer Price Index for All Urban Consumers (CPI-U) over the same period.

While BLS does not release similar data for individual states, Georgia (and especially the Atlanta metro area) is not immune to the wage pressures being seen elsewhere in the nation.

All data in this report are seasonally adjusted unless noted otherwise.

Wednesday, July 12, 2017

Crippling Medicaid Cuts Could Upend Rural Health Services in Georgia


When her pregnancy hit a crisis, Ginger Peebles rushed to her hospital in Swainsboro, Ga., where daughter Brenlee Pepin was born healthy. But that hospital closed a year later, a casualty of the financial problems plaguing rural areas. (Family photo courtesy of Kimberly Howell)
ATLANTA — Each day as Ginger Peebles watches daughter Brenlee grow, she sees the importance of having a hospital close by that delivers babies.
Brenlee’s birth was touch-and-go after Peebles realized something was wrong. “I couldn’t feel the baby move, and my blood pressure was sky-high,” said Peebles, a nurse.
Dr. Roslyn Banks-Jackson, then an OB-GYN specialist at Emanuel Medical Center in Swainsboro, Ga., diagnosed preeclampsia, a potentially lethal complication of pregnancy, and induced labor to save Peebles and the baby. Brenlee was born on Oct. 28, 2014, completely healthy.
Had Peebles given birth the following year, she might not have been so fortunate, she said. Emanuel shuttered its labor-and-delivery unit the next spring, becoming one of a handful of such units in the state to close from 2010 to 2015, most because of budget problems. Another is expected to close this month, said Daniel Thompson, executive director of the Georgia OBGyn Society.Republican bills to replace the federal health law would worsen rural areas’ financial straits through reductions in Medicaid funding. Patient advocates predict that would lead to fewer enrollees, more shutdowns of rural facilities, reduced payments to doctors and fewer programs for people with health needs or disabilities. In the aggregate, such changes threaten the health of thousands of state residents, especially those in rural areas.
“I’ve seen changes, and I’ve seen cuts, but I’ve never seen changes like what’s being proposed in this bill,” said Eric Jacobson, executive director of the Georgia Council on Developmental Disabilities. “This is the first time it’s been this scary.”
Possible Strains On A Lean Budget
One of the key aims of the House and Senate bills is reversing the Affordable Care Act’s expansion of Medicaid. But the legislation also would institute changes to the federal-state health program for low-income residents that could devastate states such as Georgia that didn’t expand Medicaid. Georgia already ranks 45th in the nation in per capita Medicaid spending, according to the Georgia Budget and Policy Institute.
The bills would switch Medicaid from an entitlement — in which the federal government agrees to pay its share of costs for anyone who qualifies for the program — to a system in which the federal government by 2020 would limit its payments and reimburse states based on a per capita formula.
The nonpartisan Congressional Budget Office concluded in a report released June 29 that the Senate plan would slash 35 percent of expected federal Medicaid funding by 2036.
“Cuts now would cripple rural Georgia,” said Dr. Ben Spitalnick, president of the Georgia chapter of the American Academy of Pediatrics.
He said that is because most primary care visits, which include OB-GYN, pediatric and adult care, in the state’s sparsely populated areas rely heavily on Medicaid reimbursements.
The federal cutbacks would have to be offset by the state. But that means taking money from other programs or raising taxes. As a result, state officials facing those shortfalls would likely scale back an already lean Medicaid coverage.
“If you cut back, [people] still go to the hospital, they’ll still need care. No matter what you do, the buck stops somewhere,” said Renee Unterman, a Republican state senator who chairs the health and human services committee. In the end, she added, the cost for that uncompensated care gets passed to taxpayers and consumers through higher health costs and insurance premiums.
Georgia’s rural hospitals have proved vulnerable. Five closed in the past five years and another two merged. Plus, several have closed their emergency rooms.
That translates to a loss of doctors in affected counties. Of Georgia’s 159 counties, 79 do not have an OB-GYN specialist, and 65 do not have a pediatrician, according to 2015 figures from the Georgia AAP and the Georgia OBGyn Society.
Close to 1.7 million Georgians, or nearly 1 in 5 state residents, live in these areas, according to figures from the Rural Health Information Hub.
Improving Pay For Doctors
For 15 years, Georgia Medicaid reimbursed primary care doctors at only 60 percent of the amount that the federal Medicare program reimbursed similar services, said Ward.
But in 2015, the Legislature implemented three rounds of pay increases to primary care doctors, including pediatricians and OB-GYNs, to bring them in line with the Medicare reimbursement.
Many of these doctors are now concerned those rates would be the first to be lowered. “That’s our big fear,” said Rick Ward, executive director of the Georgia chapter of the AAP. “We just clawed our way back and to deal with it again would just be unbelievable.”
Key among those concerns are prenatal care in rural areas. With a maternal mortality rate that is among the worst in the country, OB-GYNs are worried that the cuts would eliminate fragile solutions to doctor shortages that the state has implemented.
For example, pregnant, low-income women in 17 counties around Augusta can arrange for a ride in a van, paid for by Medicaid, for their prenatal visits at the medical school at Augusta University. The service has been vital in keeping these women healthy and insuring successful births. Advocates fear it is the type of program that could face problems if Medicaid funding becomes tight.
People With Disabilities Fearful
Advocates for residents with disabilities worry that home health care would be likely to suffer from the cuts.
That’s because while states are required under Medicaid to pay for nursing home stays, care for people living at home has been optional.
About 38,000 people in the state get the services, also called community-based benefits. Qualifying takes years, and benefits are not guaranteed, even for people who are eligible. Almost 10,000 Georgians are on the waiting list, according to Jacobson, because there is not enough money in the Medicaid budget to cover everyone.
One of those who is getting coverage is Joshua Williams, 22, who has severe cerebral palsy and needs constant care at home and school.
“I’m terrified” that funding cuts could end the program, said his mother, Mitzi Proffitt, 53. “I’d have to quit my job” to take care of him. Williams’ stepfather, Jack Proffitt, 65, has advanced cancer and cannot provide much assistance.Nursing home or institutional care for a year, on average, is $172,280, said Jacobson, while the average home health care is $28,901.
Williams, who is on the dean’s list at East Georgia State College in Swainsboro and loves NASCAR, also admits to being “very scared.” He said if his coverage is discontinued, he would have to drop out of college, ruining his hopes of becoming a sports broadcaster. He is eager to get a part-time job until he graduates.
“I want to work. I don’t want handouts,” he said.
A supporter of President Donald Trump’s, Williams said he is counting on the president to keep disability benefits in place and to ensure that health care is affordable for all.
“He thinks that if Trump knew his story, he’d get on this and fix things,” said Mitzi Proffitt.
“I like him because he’s a businessman, but he said he has heart,” Williams added.
Joshua Williams, who receives home health care services through Medicaid, is worried about funding changes being considered by Congress. But he is counting on President Donald Trump to keep disability benefits in place because “he said he has heart.” (Photo by Virginia Anderson/KHN)

This story was originally published by Kaiser Health News, a nonprofit health newsroom whose stories appear in news outlets nationwide, is an editorially independent part of the Kaiser Family Foundation.

Friday, July 7, 2017

Georgia’s metro edge counties showing fastest job growth

Counties on the edge of Georgia's metro areas are showing some of the fastest job growth rates, according to recently released information from the U.S. Bureau of Labor Statistics.

The 2007-2009 national recession hit Georgia hard. Between December 2007 and December 2009, more than 8% of jobs in the state disappeared.

As we all know now, since then, the state has experienced a strong rebound in jobs, stronger than the nation as a whole. Since December 2009 through the end of December 2016, the state has gained more than half-a-million new jobs, more than offsetting previous losses.

The story of job growth in Georgia since the recession has been the increasing urbanization, as employment growth concentrated in the state’s metro areas, especially in the Atlanta and Savannah metros.

What is less obvious is that some of the strongest post-recession growth has been not in the core counties in these metro areas, but in their so-called “edge counties”, those counties at the periphery, but still included in the metro areas.

These counties have a host of advantages including lots of lower price land that can be developed at lower cost, along with lower taxes, while still being in commuting range of urban centers.

And this story isn’t just about the Atlanta metro area. Non-core counties are showing remarkable job growth in a variety of metro areas around Georgia.

The job numbers speak for themselves (December 2009-December 2016):

  • Twiggs County (Macon MSA): Added 1,317 jobs (+133.4%)
  • Burke County (Augusta MSA): Added 4,570 jobs (+77.0%)
  • Jackson County (Atlanta MSA): Added 9,745 jobs (+59.1%)
  • Echols County (Valdosta MSA): Added 230 jobs (+45.1%)
  • Bryan County (Savannah MSA): Added 2,415 jobs (+42.9%)
  • Oconee County (Athens MSA): Added 3,199 jobs (+40.6%)
  • Jones County (Macon MSA): Added 1,329 jobs (+40.2%)
  • Forsyth County (Atlanta MSA): Added 20,033 jobs (+38.0%)
  • Monroe County (Macon MSA): Added 1,871 jobs (+32.8%)
  • Troup County (Atlanta MSA): Added 9,816 jobs (+32.7%)

For the most recent time frame (December 2015-December 2016), the story remains the same, with Twiggs, Burke, and Oconee counties showing the highest percentage job growth for Georgia counties in metro areas, followed by Meriwether, Murray, and Jackson counties.

Here are the county job growth numbers for the top 10 metro counties between December 2015 and December 2016 (most recent data available from the U.S. Bureau of Labor Statistics):

  • Twiggs County (Macon MSA): Added 1,156 jobs (+100.7%)
  • Burke County (Augusta MSA): Added 3,533 jobs (+50.7%)
  • Oconee County (Athens MSA): Added 1,092 jobs (+10.9%)
  • Meriwether County (Atlanta MSA): Added 422 jobs (+9.7%)
  • Murray County (Dalton MSA & Chattanooga MSA): Added 880 jobs (+9.6%)
  • Jackson County (Atlanta MSA): Added 2,115 jobs (+8.8%)
  • Lee County (Albany MSA): Added 491 jobs (+8.1%)
  • Walton County (Atlanta MSA): Added 1,520 jobs (+7.2%)
  • Paulding County (Atlanta MSA): Added 1,531 jobs (+7.0%)
  • Oglethorpe County (Athens MSA): Added 107 jobs (+6.9%)

Admittedly, many of these counties start from a low employment base, which makes it easier to reach the high percentage increases, but consistently, these high job growth counties share one common feature: They are located in a metro area, but are not the core county for that area.

The fast growth of these “edge counties” calls into question earlier reports that people were abandoning the suburbs in favor of urban cores.

Judging from the data, it appears that while Georgia is participating in the general trend towards urban areas over rural ones, many citizens of the state are increasingly able to find work not in the urban core but at the outer edges of these increasingly metro areas.

Thursday, June 8, 2017

Georgia dependent on Federal Dollars

 Proposed Federal budget for FY2018

New information provided by the Census Bureau’s 2015 Annual Survey of State Government Finances shows that 34.3% of Georgia’s General Revenue comes from the Federal government.

If fiscal conservatives get their way and the Federal government does make large cuts in Federal spending, Georgia would have to scramble to make up the revenues currently supplied to the state by the Federal government either by cutting programs or raising taxes.

According to an analysis conducted by Governing magazine, Louisiana and Mississippi were the most dependent on Federal funds (about 42% each), followed by Arizona and Kentucky (40% each).
In contrast, North Dakota was the least dependent (18%).

Many readers may believe that the states closest to the DC area would be most dependent on Federal largesse, but in fact Virginia (21.5%) and Maryland (30.8%) were considerably less dependent on Federal assistance than Georgia.

According to Governing, monies for transportation, Medicaid, and other social assistance programs topped the reasons for Federal funding.

In Fiscal Year 2015, Georgia spent nearly $12.2 billion on public welfare, of which $6.9 billion (56.6%) were provided by Federal revenues. 

“The Census Bureau’s classification of public welfare funding includes Medicaid, Temporary Assistance for Needy Families (TANF), child welfare services and a range of other assistance programs mostly for low-income individuals. It excludes school nutrition programs and the Special Supplemental Nutrition Program for Women, Infants and Children (WIC),” according to the news article.

The state spent $17.8 billion on education, of which $3 billion (17.2%) came from the Federal government.

Spending on roads and highway infrastructure totaled nearly $2 billion, with the Feds paying $1.1 billion, or more than 56% of the total bill. Mass transit funding is not included in these numbers.

These payments will be even greater as the state is asking the Feds to reimburse it for the costs of replacing the I-85 bridge that collapsed earlier this year.

Georgia continues to pursue Federal funds for deepening the Savannah River to support Savannah’s port and may need the Federal Energy Department to forgive loans given to Plant Vogtle’s nuclear plant construction, if the two nuclear reactors currently under construction are not completed.

You can see the entire Census Bureau report here and read the Governing analysis here.

Monday, May 15, 2017

Westinghouse & Southern Company: Good News and Bad News for Workers

Late on Friday, May 12, 2017, the Southern Company agreed to take over construction of the nuclear construction site at Plant Vogtle.

This means that the 6,000 workers on site in eastern Georgia will be able to continue building the reactors at least until June 3.

Southern Nuclear (a subsidiary of the Southern Company) and Georgia Power will become the main contractor for the Plant Vogtle expansion whose ownership is shared between Georgia Power, Oglethorpe Power, the Municipal Electric Authority of Georgia, and Dalton Utilities.

Westinghouse, which had filed for bankruptcy in March, appears ready to walk away from the project if it can receive approval from the bankruptcy court, leaving the future of the two reactors in the hands of the utilities and the Georgia Public Service Commission.

Georgia Power still has not committed to completing both reactors.

Options include completing one or both reactors, converting one or both reactors to natural gas, or giving up on the project entirely.

The role of the Georgia Public Service Commission is becoming extremely important as discussions continue on how to pay for the two new reactors, which are billions of dollars over budget.

E&E News reports that

"Georgia Power has a settlement with the Public Service Commission on how to handle Vogtle's costs going forward. The utility and the PSC staff negotiated the agreement, in part, after the project's costs rose 30 percent from when it started.

The settlement includes the utility absorbing an amount through a lower rate of return on equity if the reactors are not online by 2020. Consumers would shoulder the rest.

Southern stated in filings earlier this month that the project is not likely to meet that deadline. Georgia Power executives confirmed the same in a routine hearing about the project's cost and schedule last Thursday.

Georgia Power has already hinted that it will want to revisit that settlement, which was put in place months before Westinghouse filed for bankruptcy protection. The PSC staff has held firm that the agreement remains in place, according to emailed statements obtained by E&E News (Energywire, May 5)."

The PSC took comments from the public at last Thursday’s meeting, and many were not pleased that Georgia utility ratepayers have been paying for the plants since 2009 when Georgia Power began charging customers for the project’s costs years before the plants would come actually generate electricity.

WSAV-TV (Savannah, Ga.) has nicely captured the current situation and you can watch their report here.

Atlanta Progressive News reports that the next public hearing on Vogtle will be June 29, 2017, when the construction monitors on PSC staff will testify.