Atlanta metro area’s 2.8% unemployment rate in July says a lot about the current state of the labor market

Atlanta metro area employment and unemployment numbers for July tell an interesting tale about the area’s current labor market.

The Georgia Department of Labor reports that the area’s unemployment rate dropped to 2.8%, down 0.4% over the month as the number of unemployed persons declined by 11,842.

With the number employed growing by only 692, most of the decline came as 11,145 people dropped out of the labor force.

People choose to enter or exit the labor force for multiple reasons. Pressure on family budgets can draw people into seeking employment, while the opportunities to earn higher wages can also induce people to exchange their nonwork time for a paycheck.

Groups of people who are outside the labor force normally include nonworking spouses of employed people, fulltime students, and people who have chosen to retire from employment and are living off their pensions and retirement savings.

With inflation in the Atlanta area running at an annual rate of 11.5% as of June, it would be expected that inflation pressures would drive people back into seeking work, but so far, the July numbers do not indicate that is the case.

On a more positive side, higher wage rates might also encourage people to seek employment, but the reluctance of employers to raise wages, and therefore increase their employment costs, has muted wage increases.

At least for now you have a standoff. People seeking employment are finding it relatively easy to find work, but people who remain outside the labor force are not rushing in to fill vacancies. Probably, this equilibrium will not continue.

Longer term, if inflation continues to erode savings and household earnings, or if employers choose to raise wages because they find they are losing business due to unfilled vacancies, more people may choose to seek employment and thus increase both the labor force numbers as well as possibly the unemployment rate.

Alternatively, if the economy slows, employers may find it unnecessary to fill vacancies and may begin to lay off workers. This effect will also increase the unemployment rate.

In either case, it is likely to expect the Atlanta area unemployment rate to increase over the next year.

Fulton County average weekly wage above $2,000; exceeds U.S. employment and wage growth rates in 1st quarter of 2022

 Both employment and wages in Fulton County (part of the Atlanta, Ga., metro area) grew faster than the nation over the 12 months ending in March 2022, according to new information provided by the U.S. Bureau of Labor Statistics.

Average weekly wage in Fulton County was $2,068, the highest average recorded among the large counties in the state. Nationally, the average weekly wage came in at $1,374.

Employment in Fulton County grew by 5.8% over the year, while wages increased by 8.3%. Nationally, employment grew by 5.0%, as wages increased by 6.7% over the year. 

Of the 11 largest counties in Georgia, only Fulton and Clayton counties (both in the Atlanta, Ga., area) recorded employment growth faster than the nation with Clayton County employment rising by 8.4%. Muscogee County (Columbus, Ga., area) was the only large county in the state that showed a decline with employment, dropping 0.4%.

With the publication of the first quarter 2022 data, Forsyth County was added as one of the nation’s 355 largest counties by employment. With the addition, Georgia now has 11 counties that meet the criteria to be included in the nation’s largest counties which was expanded to include all counties with employment of 75,000 or more.

Compared to 10 years ago, two counties (Forsyth and Hall) in Georgia have been added to the nation’s largest counties by employment size. No county has been dropped from the list.

Of the nine counties that appeared on both the first quarter 2012 and 2022 lists, Fulton County recorded the fastest employment growth of 27.8% over the decade followed by Chatham County (Savannah, Ga., area) 24.1%, Cobb County (Atlanta, Ga., area) and Gwinnett County (Atlanta, Ga., area) 20.1%.

Two of the nine counties have recorded employment declines over the past decade with Muscogee County (Columbus, Ga., area) down 2.2%, and Bibb County (Macon, Ga., area) down 0.5%.

Average Weekly Wages

Seven counties in Georgia saw the average weekly wage increase faster than the nation. Hall County (Gainesville, Ga., area) recorded a 10.4% increase in wages followed by DeKalb County that showed a 10.2% increase in the average weekly wage.

Other counties with average weekly wage percentage increase greater than the nation included Chatham County (Savannah, Ga., area) up 9.4%, Fulton County (Atlanta, Ga., area) 8.3%, Forsyth County (Atlanta, Ga., area) 7.9%, Gwinnett County (Atlanta, Ga., area) 7.5%, and Cobb County (Atlanta, Ga., area) 6.6%.

Bibb County (Macon, Ga., area) recorded the lowest average wage of the large counties in the state at $970 per week as well as recording the smallest increase over the year at 2.2%.

 

Table 1. Largest Georgia Counties Employment Levels

County                                    1^st Quarter 2012                            1^st Quarter 2022

Bibb County                                       79,900                                                  79,500

Chatham County                              132,000                                                 163,800

Clayton County                                 111,100                                                 118,800

Cobb County                                      301,900                                               371,700

DeKalb County                                  276,100                                                300,400

Forsyth County                                 N/A                                                         79,300

Fulton County                                   711,700                                                 909,900

Gwinnett County                             306,300                                                  367,800

Hall County                                         N/A                                                      92,100

Muscogee County                           92,900                                                      90,900

Richmond County                            99,000                                                   102,700

Georgia’s July unemployment rate: Nothing to see here

 Georgia Nonfarm Employment

Georgia’s unemployment rate in July came in at 2.8%, statistically unchanged from the prior month while remaining below the national unemployment rate of 3.5%.

The unemployment rate is calculated by comparing the number of unemployed to the state’s labor force, and both numbers showed very little change over the month. The number of employed persons in the state was statistically unchanged as well.

In July 2021, the state recorded an unemployment rate of 3.9%, so this month’s rate is statistically much lower than its year-ago level.

Concerningly, the state’s labor force growth has slowed significantly since the beginning of the year, even as initial claims for unemployment continue to decline in the state.

Even as labor force growth slows, the state’s labor market remains strong. Nonfarm employment for July totaled 4,812,100, another record, although the increase over the month (12,500) was not statistically significant.

From July 2021 to July 2022, Georgia has seen an increase of 214,300 nonfarm jobs for a 4.7% growth rate.

With Atlanta posting an inflation rate of 11.5% (as of June), it remains to be seen whether pressures on household budgets due to increasing costs may push people back into the labor force.

Job openings and quit numbers turn positive in June for Georgia as layoffs and discharges decline

The number of job openings posted in Georgia rebounded in June, rising by 51,000, according to new information from the U.S. Bureau of Labor Statistics. The number of job openings for May was revised up to 376,000 from a preliminary count of 367,000

Job openings totaled 427,000 compared to 368,000 recorded a year ago, an increase of 9.3%. The job openings rate rose to 8.2 in June, up from a revised 7.3 in May.

The number of hires were statistically unchanged over the month and over the past year.

While the total number of separations were virtually unchanged over the month, the number of people choosing to leave their positions rose while the number of layoffs and discharges declined.

Quits rose by 27,000 in June to a total of 211,000, the same number of quits posted in June of 2021. The quit rate in June came in at 4.4, up from 3.8 in May but below the 4.6 rate recorded the prior year.

Layoffs and discharges declined by 24,000 in June to a level of 42,000 in the month. The layoffs and discharges rate dropped from 1.4 in May to 0.9 in June. The number of layoffs and discharges occurring over the month was the lowest level recorded since May 2019.

Over the past 12 months, the number of layoffs and discharges in the state have declined by 21,000.

The increase in job openings can be taken as a proxy for increasing business optimism, while the number of quits can be a proxy for increased optimism among employees who feel more confident about finding another position. 

Companies seeing better business conditions in the state along with an increasing number of employees leaving their jobs voluntarily is resulting in less need for layoffs and discharges and generally reflect more robust economic conditions in Georgia. 

Atlanta area inflation in July for key items remains a problem for consumers

 

Costs for food at home and rent remained elevated in July, although gas costs declined after rising in the previous two months.

While the All-Items index in Atlanta-Sandy Springs-Roswell, Consumer Price Index for All Urban Consumers, is published only for even numbered months, the U.S. Bureau of Labor Statistics does produce a few numbers for the Atlanta area on a monthly basis and these are now available for July 2022.

In July, costs for food at home rose 1.9%, the seventh consecutive month that this index has posted a monthly increase of greater than one percent. Over the first seven months of 2022, costs for food at home have increased 11.3%, while over the past 12 months, the index has risen 13.0%, the highest 12-month increase since BLS began posting monthly changes in 1999.

Rent of primary residence increased 1.0% in July, a smaller monthly increase than was posted in May and June of this year. So far in 2022, rent costs have risen 6.5% and have increased 12.8% over the past 12 months. As with food at home, this is the highest 12-month increase since BLS began posting monthly changes in 1999.

Gasoline costs dropped 6.6% in July, after rising in May and June. Despite last month’s decline, gasoline prices have increased 30.3% since the beginning of 2022 and have risen 39.6% over the past 12 months. This increase has occurred despite the governor’s order since April to suspend the collection of motor fuel and diesel fuel taxes. Without this suspension, retail gasoline costs would have been even higher.

National comparisons

Comparing increases in consumer costs for the nation with those in the Atlanta area, costs for food at home have risen at approximately the same rate nationally as in the Atlanta area, while the Atlanta area continues to see faster rising rents. Nationally, rent of primary residence has increased 6.3%, less than half of the rate of increase recorded in the Atlanta area.

Gasoline costs have risen at a slightly slower rate in the Atlanta area than for the nation, which posted in July a 12-month increase of 44.0%. While a few states, including Connecticut, New York, and Maryland, have suspended their state motor fuel taxes, which offsets a portion of the cost increase for consumers and subsequently lowers the index for gasoline (all types), most states continue to collect their tax.

Atlanta area’s employment and unemployment numbers still look favorable in June

 Atlanta area labor market indicators, January 2019 - June 2022

The Atlanta area’s unemployment rate rose to 3.2% in June as growth in the number of unemployed exceeded growth in the number of employed people.

Overall, the area’s labor force grew by 20,431 in June, a much larger number than recorded in any month since June2021. Of those additions to the labor force, 2,798 people were added to the employment rolls while 17,633 people joined the ranks of unemployed.

The growth in labor force is a positive sign, although the fact that many of these ended up on the unemployment list may show a slowing of the overall economy even as individuals return to the job market. It is impossible to measure how rising inflationary pressures may be driving individuals to seek employment, but it is certainly a possible factor in the labor force increase.

Since the employment/unemployment data are available only before seasonal adjustment, it is useful to compare this month’s data with not only the prior month, but also with data from the past June period. Since June 2021, the Atlanta area labor force has grown by 87,371 with employment up by 128,247 and unemployment down by 40,410. As a result, the area’s unemployment rate dropped from 4.5% to 3..2%.

Atlanta area job market

Atlanta area jobs grew by 10,200 in June with all of these gains occurring in the private sector as governments recorded a net decline over the month after seasonal adjustment. While the increase was improvement in April’s revised 8,400 job gain, it is still only half of the increase recorded in either January or February of this year.

Looking at jobs data before seasonally adjustment, the private sector added 23,300 jobs over the month, while government jobs declined by 2,700 with a small 300 job drop in federal government employment, and 1,200 job declines in both state and local governments.

Within the private sector, professional and business services was the large gainer with employment up by 5,900 over the month. Food services and drinking places also added significant employment, with 5,600 new jobs created in June.

Retail trade marked a decline with 500 fewer jobs in June compared to the previous month.