Employment tends to follow seasonal variations. These
variations are well known and re-occur annually allowing the Bureau of Labor
Statistics to adjust their job numbers by making seasonal adjustments.
Take out those seasonal adjustments and you can see that
Georgia’s job growth in August was the slowest in six years.
While Georgia added 20,300 nonfarm jobs over the month, this
number falls way below the 33,300 jobs added in August 2015. Not since 2010,
when the state recorded a rise of 16,000 jobs, has Georgia experienced such a
slow August in job creation.
Job growth in Georgia during August, 2006-2016
Despite the state’s unemployment rate dropping to a
seasonally adjusted 4.9 percent rate, the employment picture was not as
positive as expected.
State’s 12-month job
increases declining
While Georgia continues to outpace the nation in job growth,
that trend is slowing, which becomes a worrying sign of a potential slowdown in
the state.
For the 12 months ending in April, Georgia saw 137,700 net
new jobs created in the state. Since then, the 12-month increases have fallen
each month, and in August, the 12-month increase was only 107,500 new jobs.
Number of jobs created in Georgia over the previous 12 months, January - August, 2016
It could be that employers are having a rougher time finding
skilled workers without wanting to raise wage rates, or companies may be more
cautious in their hiring; but for whatever reason, Georgia continues to create
new jobs but fewer of them.
Trend not the same
for the nation
The drop-off in new jobs did not extend to the nation. The
U.S. added 224,000 new jobs (before seasonal adjustment) in August, 25,000 more
than recorded for the same month in 2015, although this was fewer than in the
month of August for the years 2011 to 2014.
Over the 12 months ending in August, the nation recorded a
job growth increase of 1.7 percent (before seasonal adjustment), less than the
2.0 percent growth rate recorded in 2015 or the 1.9 percent rate in 2014, but
equal to the growth rates recorded in August 2012 and 2013.
The drop-off in Georgia does not appear to be part of a
significant national trend, at least not yet.
Problem is Georgia’s
job market outside Atlanta
A key component for Georgia is the Atlanta metro area, which
is home to more than 60 percent of the state’s nonfarm employment.
In August, the Atlanta metro area grew by 14,500 jobs, fewer
than for the same month in 2015, but representing about 71 percent of the state’s
new jobs, way above their normal percentage.
That says that the slowdown is being felt more widely in the
rest of the state than in the Atlanta metro area, which is why the slowdown may
not be as visible in metro Atlanta.
Slow metro growth continues in Augusta, Columbus, Dalton,
Hinesville, and Warner Robins.
In these areas, new job creation is slower than both
statewide and the nation, most likely for a variety of reasons including the
desire of high-tech and service industries to locate in the Atlanta metro area
where the larger percentage of a higher-educated workforce is available, as
well as other amenities such as public transportation and cultural
opportunities.
Savannah remains a bright spot with 12-month growth at 4
percent, as its combination of port-related activities, professional and
business services, and tourism makes it a regional hub.
What does this have
to do with December?
Although we tend to connect job growth with a burst each
year around the Christmas season as retailers add seasonal hires in November, August
is actually a bigger month for hires than November or December in Georgia.
With the exception of 2009, the August job growth number in
Georgia has been larger than the comparable number for November or December in
that same year since the beginning of the century.
If that trend holds for this year, Georgia’s relatively
small 20,300 August job growth will mean a relatively smaller job market in
November and December.
While some retailers and fast-food operators might be
worried about seasonal hires this year, overall, the job market may not be as
tight as anticipated, although wages above the $7.25 mark may still be
necessary to entice workers given the ongoing Fight-for-$15 movement.
Workers may find low-paying seasonal jobs in November and
December in the $9-$10 range, but better-paying career positions might be
harder to find in Georgia, and especially outside the Atlanta metro area, if
these trends persist.
For job seekers, the message is to find that new position
now and not hope that a tighter job market might raise wages later in the year.
For state policymakers, they should not be complacent about
job creation outside the Atlanta metro area. In many smaller metro areas of the
state, and for rural areas, the future does not look as bright.
