Georgia released its statewide employment data for July 2021
on August 19. In announcing that the state’s unemployment rate had dropped to 3.7
percent, the Georgia Department of Labor news release headline read:
Unemployment Rate Drops to Pre-Pandemic Level in July
(GDOL
News Release)
While the good news is that the state’s unemployment rate
did drop by three-tenths of one percent from June to July, the state has not
yet achieved the levels it had gained in March 2020 before pandemic-related
cutbacks and closures caused a sharp increase in the state’s unemployment rate
and an equally sharp contraction of its employment levels.
Unemployment rate
In October 2019, the state reported a record low unemployment
rate of 3.3 percent, which it maintained through January 2020; but by February,
the rate was starting to creep upwards, reaching 3.6 percent in March 2020.
Layoffs exploded in April 2020, with the state reporting
an unemployment rate of 12.5 percent. Since then, there has been a continual
reduction in the unemployment rates up to the present.
Unemployment rates are typically published to only one
decimal point, but it is possible to carry out the calculation to multiple
decimal points and carrying out the calculation to four decimal points, one can
see that the March 2020 rate was technically 3.5923 percent.
This compares to the July 2021 rate of 3.7421, or a
difference of 0.1498 percentage points, which falls within the limits of what
the U.S. Bureau of Labor Statistics would call statistically insignificant, so the
State of Georgia chose to declare it had reached the pre-pandemic level of
March 2020 because the state labor agency could technically defend the
statement.
The Georgia Commissioner of Labor, Mark Butler, could have waited
until the August numbers are published to confirm that that the state’s
unemployment rate had reached pre-pandemic levels, but that would have been taking
the risk that the seasonally adjusted unemployment rate for August might not
continue to show a decline.
Labor force, employment, and unemployment
While the number of unemployed in Georgia has steadily
declined as the number of people employed has increased, neither measure equals
the levels achieved in March 2020.
From March 2020 to July 2021, the number of unemployed
has increased by 6,491, while the number of employed individuals has dropped by
41,424.
As a result, the state’s labor force, which is by definition
a combination of employed and unemployed, has actually declined by 34,933, or
nearly 0.7 percent.
This brings the state’s labor force slightly below the
level it reached in October 2019, even though the state’s population has
continued to increase.
The situation is also reflected in other data published
by BLS for Georgia. Georgia’s labor force participation rate has declined from
62.9 percent in March 2020 to 61.7 percent in July 2021. Labor force
participation rate is defined as representing the number of people in the labor force as
a percentage of the civilian
noninstitutional population. In other words, the participation rate is the
percentage of the population that is either working or actively looking for
work.
Georgia’s employment-population ratio has also dropped
from 60.7 percent in March 2020 to 59.4 percent in July 2021. The
employment-population ratio represents the number of employed people
as a percentage of the civilian
noninstitutional population. In other words, it is the percentage of the
population that is currently working.
What happened to these people? Statisticians do not know.
Some may have chosen to retire, others may have simply dropped out of the labor
force. Whether and when they will re-enter the labor force is also unknown.
What is known is that there is a group of former workers who so far have not been
re-employed as of July 2021, so implying that the state has fully recovered its
pre-pandemic levels seem premature at best.
Nonfarm employment
The State of Georgia and BLS also publish a separate monthly
survey of nonfarm jobs, and this also confirms that the state has not yet
reached its pre-pandemic levels.
In July 2021, nonfarm jobs in Georgia totaled 4,572,100.
While this was a good increase from June (up by 43,600), it still leaves the state
64,900, or 1.4 percent, short of the number obtained in March 2020 and more
than 94,000 jobs short of the highest level achieved in February 2020.
Much of this shortfall can be attributed to the
disappearance of jobs in the Atlanta metro area, where July’s jobs total of 2,797,200
is still 67,100 jobs below the level it achieved in March 2020, and 89,500
short of its peak in January 2020.
Whether the state, and the nation, can continue to grow
its employment base remains to be seen, as Covid-related variants raise
questions about the ongoing strength of the economy through the end of 2022,
but in any case, there is still more work to be done to re-establish all the
employment that has been lost from the pre-pandemic time.
Note: All data discussed are seasonally adjusted. Seasonal
adjustment is a statistical procedure that removes the effects of normal
seasonal variations—resulting from events such as holidays, school openings and
closings, and weather—from data series. Seasonally adjusted data make it easier
to observe cyclical and other economic trends, such as those associated with
general economic expansions and contractions. For further information,
see Seasonal
adjustment of Current Population Survey (CPS) estimates.
Charts are from the bls.gov website.