Sunday, July 22, 2018

Georgia’s unemployment rate is good but it has been better in the past

Georgia’s unemployment rate dropped down to 4.1% in June (seasonally adjusted), a decrease of 0.1 percentage point over the month and a drop of 0.6 percentage points since June 2017.

Nonfarm employment in the state rose by 14,200 in June and has increased by 77,300 jobs since June 2017.

In the press release announcing the June 2018 preliminary data, Georgia Labor Commissioner Mark Butler is quoted:

“Georgia’s labor force and job market are as big as they have ever been, and they continue to grow.”  

The statement implies but left unsaid that the state’s current job market is the best it has ever been, which is misleading.

While the unemployment rate is technically true and even though these are good numbers, it should be noted that the current unemployment rate is not unprecedented.

Georgia’s labor force has grown as its population increased over the past two decades, so a larger labor force in a good economy is to be expected but the June 2018 unemployment rate of 4.1% is higher than the numbers reported by the state prior and during part of the 2001 recession.

Georgia consistently posted unemployment rates below 4% between May 1999 and July 2001, according to data obtained from the U.S. Bureau of Labor Statistics.

Here is a comparison of the June 2001 and June 2018 (Data are seasonally adjusted.).

June 2001
June 2018
National unemployment rate

Georgia unemployment rate
Georgia unemployed
Georgia employed
Georgia labor force
Georgia nonfarm Employment

The state’s labor force has expanded by over 900,000 people, so that even with the current low unemployment rate, more people are unemployed now than 17 years ago.

For the state’s unemployment rate to match the June 2001 figure, an additional 16,700 people would have to be employed in June 2018 meaning that June’s increase in nonfarm employment grew at only half the pace needed to match the June 2001 figures.

Also, in the press release announcing the June 2018 preliminary data, it stated that

“Construction in particular is continuing to have a very strong year, seeing growth of 8.8 percent over the year. This is the largest year-over-year percent gain since August 1999.”

Again, technically the Georgia Department of Labor is correct, but that still puts construction employment below the level it achieved back in June 2001.

In June 2001, construction employment in Georgia stood at 208,600, 9.000 more jobs than in June 2018.

The bad news is that by June 2001, unemployment rates were already rising in Georgia, and the state has yet to see a return to the levels reached at the beginning of the century.

The good news is that Georgia’s employment situation may have further gains before the next recession begins.

Several more good months of a strong national economy, and Georgia may once again see a steady stream of monthly unemployment rates in the 3 percent range.

When Georgia’s unemployment rate falls below the levels recorded back in 1999-2000, and when real wages in the state appreciably rise, then the state agency can brag that “Georgia labor market sets records”.

Here is the full news release issued by the Georgia Department of Labor.

Georgia Labor Commissioner Mark Butler said Thursday that Georgia once again set records for employed residents, labor force and jobs for June, continuing a trend from recent months.  
The state is approaching the 5-million mark for employed residents. At the same time, Georgia posted more than 4.5 million jobs and a labor force of almost 5.2 million.
Meanwhile, the jobless rate dropped to a level not seen since 2001 even as the national rate ticked up .2 percent.
“While the nation’s jobs and unemployment numbers are beginning to level off, Georgia continues to improve across just about every metric,” said Butler. “Georgia remains one of the premier states in which to live and work.”

In June, Georgia hit a record high 4.94 million employed residents. That number was up by 15,345 over the month and by more than 123,452 since last June.
Likewise, Georgia’s labor force continued to climb, increasing by 10,401 in June to a record high of about 5.1 million. It has grown by 97,510 over the last 12 months.
Georgia’s June unemployment rate came in at 4.1 percent, down .1 percent over the last month. The state rate was 4.7 percent a year ago. The national unemployment rate is slightly better at 4 percent, though the gap has narrowed over the last year.
Jobs were also up by 14,200 in June to over 4.5 million, an all-time high. Over the past 12 months, Georgia added 77,300 jobs.
Butler said all of these numbers continue trends going back many months.
“Georgia’s labor force and job market are as big as they have ever been, and they continue to grow,” said Butler. 
Most of those job gains came in the professional business services; other services; and the trade, transportation, and utilities industry.
Over the past year, Georgia has added more than 10,000 jobs in each of the following sectors: trade, transportation and utilities; education and health services; construction; and leisure and hospitality. Construction in particular is continuing to have a very strong year, seeing growth of 8.8 percent over the year. This is the largest year-over-year percent gain since August 1999.
“When you see that big of a jump in construction jobs over the year, that points to a strong economy,” said Butler.
The number of unemployment claims filed in June was down about 2 percent and remain down by nearly 15 percent over the last year.  
There were 57,752 jobs posted on during June. Of those jobs, 36 percent were for STEM occupations.