Tuesday, June 23, 2020

Georgia personal income up 3.1% in the 1st quarter of 2020; nation rises by 2.3%

Personal income growth, 1st quarter 2020

Personal income in Georgia rose 3.1% at an annual rate in the first quarter of 2020 according to new information released by the U.S. Bureau of Economic Analysis.

The increase equaled the percentage gain in the 4th quarter of 2019 but fell short of the 6.1% gain recorded by the state in the 1st quarter of 2019.

For the U.S., personal income increased 2.3% in the first quarter of 2020, a deceleration from the 3.6% increase recorded in the 4th quarter of 2019.

For the 1st quarter of 2020, personal income in the state totaled $522.194 billion.

Personal income is the income received by, or on behalf of, all persons from all sources: from participation as laborers in production, from owning a home or business, from the ownership of financial assets, and from government and business in the form of transfers. It includes income from domestic sources as well as the rest of world. It does not include realized or unrealized capital gains or losses.

The report contains information for the months of January, February, and March and so comes before the shelter-in-place order given by Governor Kemp, which was effective on April 3. With the order, the state’s economy entered into a much slower period that will be reflected when information for the 2nd quarter is released later this year.

Types of income

BEA classifies personal income by components of net earnings; dividends, interest and rent; and transfer receipts.

Net earnings by place of residence is earnings by place of work less contributions for government social insurance, plus an adjustment to convert earnings by place of work to a place-of-residence basis.

Transfer receipts include items such as social security benefits, state unemployment benefits, and Medicare and Medicaid payments.

Over the first quarter of the year, of the $3.962 billion increase in personal income for the state, net earnings increased by $845 million; dividends, interest and rent added $711 million; and transfer receipts climbed by $2.407 billion.

In Georgia, net earnings contributed 0.7 percentage points towards the state’s 3.1% increase in the first quarter of the year with dividends, interest, and rent accounting for 0.5 percentage points and transfer payments accounting for 1.9 percentage points.

For the U.S., net earnings accounted for 0.2 percentage points of the nation’s 2.3% increase while dividends, interest and rent accounted for 0.5 percentage points, and transfer payments contributing 1.7 percentage points. 

Differences between the sum of the components and the totals shown are due to rounding of data.

Increases by industry

For the state, earnings grew fastest in the finance and insurance industry, up by $616 million followed by construction, which recorded increases of $369 million in the first quarter.

Earnings in the accommodation and food services industry declined by $800 million in the first three months of the year.

The largest percentage increases in earnings occurred in finance and insurance (+0.48%), construction (0.28%), and state and local government (0.27%).

The largest percentage declines were reported in accommodation and food services (-0.62%) and administrative and waste management services (-0.14%).


Sunday, June 21, 2020

Georgia recovers 15% of jobs lost in March and April; workforce at levels last seen in 2014

Georgia nonfarm employment, January 2014 - May 2020
After recording two months of job losses totaling 531,000, Georgia gained 79,600 jobs in May.

Both the size of March and April’s losses as well as the May gain are the largest on a record going back to 1990, which may explain why workers in the state may be feeling a bit uncertain as to the future.

The combination of losses and gains in the first five months of 2020 means that the state’s workforce is at the level it achieved in 2014, when the state's population included 500,000 fewer people. More than five years of employment increases have been wiped out in the first four months of 2020.

While most industries showed some level of recovery in the May numbers, three industries continued to suffer losses in May including government; transportation, warehousing, and utilities; and information.

For the first five months of 2020, the industries incurring the greatest net job losses include accommodations and food services (-149,400), professional and business services (-64,600), and education and health care services (-41,900).

Metro areas

Since the beginning of the year, the Atlanta metro area has suffered a net loss of 299,400 jobs. The loss would have been even greater if not for the 29,000 jobs added in May. The Atlanta metro area workforce is now back to levels recorded in 2015.

Although that net loss looks bad, it is better than the net losses suffered in some of the smaller metro areas in the state.

For instance, the Albany workforce in May 2020 now stands at 57,700, nearly the level it achieved in November 1992, a loss of more than 27 years’ worth of job gains.

The Augusta metro area, which includes a portion of South Carolina, has lost five years of job gains, while Savannah, the state’s third largest metro area, now has a workforce equal to its level six years ago.

Future Unclear

How long it will take the state and the state’s metro areas to recover to their 2019 levels of employment remains to be seen.

If May is of any measure, then the recovery may occur faster than after previous recessions but only if (1) consumers and businesses feel more confident about the economy, (2) the state, which is constitutionally mandated to have a balanced budget, avoids massive funding cutbacks that will impact employment, and (3) the state can avoid a second wave of the coronavirus-related shutdowns.

Thursday, June 4, 2020

Georgia metro areas record double-digit job losses for April, Brunswick loses 24% of private sector employment



Atlanta Private Sector Employment, 2015-April 2020
Brunswick Private Sector Employment, 2015-April 2020



The impact of employment losses due to the coronavirus-related shutdowns reverberated throughout Georgia in April.

Employment

Statewide, more than 457,000 private sector jobs disappeared over the month plus another 18,500 jobs in government. Despite these losses, the state fared better than the nation.

Georgia recorded a net job loss of 10.3% in April with a private sector job loss of 11.7%. Both these percentages were better than for the nation as a whole, which reported net job losses of 13% and private sector job losses of 14.6%.

For the Atlanta metro area, which represents more than 60% of the state’s labor market, job losses in the private sector totaled 11.3%.

Smaller metro areas in the state recorded even larger percentage losses over the month.

The comparatively small Brunswick area saw 24% of its private sector jobs disappear in one month.

Savannah and Warner Robins saw more than 15% of their private sector jobs vanish in April, while Columbus, Ga., recorded private sector job losses of more than 12%.

The Rome area escaped relatively easily over the month with a job loss of 5%.

Albany, which has been hit hard by the coronavirus with Dougherty County reporting a case rate of nearly 2,000 per 100,000 population, actually only suffered job losses in line with the state average.

The losses were divided between goods producing industries and service-providing industries with goods producers shedding 10.1% of their jobs, while service-providing private companies lost 11.7% of their March employment.

Unemployment rates

Consistent with the job losses in April, unemployment rates in the state moved up sharply. Statewide, Georgia recorded an unemployment rate of 12.2%, before seasonal adjustment, although that remained below the nation’s rate of 14.4%.

Among metro areas, Dalton recorded the state’s highest unemployment rate at 20.5%. Both Savannah and Brunswick reported unemployment rates in excess of 15%.

Valdosta showed the lowest unemployment rate among the state’s metro areas at 9.9%.

Looking ahead

Georgia has been one of the first states to re-open its economy. Increases in employment due to the re-opening of businesses may be partially offset by losses in business as some individuals remain reluctant to possible exposing themselves to the virus by shopping, dining, etc.

That combination of factors makes it difficult to predict employment figures for May, although they will be closely watched by others in the nation to see how the state’s economy rebounds from its April losses.