Georgia's 5.9% unemployment rate hides the slowdown in
the Atlanta area, which saw only 600 new jobs in August.
Labor force continues to decline
Georgia reported a 5.9% unemployment rate for August,
higher than the nation’s average of 5.1%, but still below its rate of 7.1% recorded
in August 2014.
The headline rate disguises the slowdown in Georgia’s
economy, and specifically in the Atlanta area.
The lower unemployment rate is due to people not participating in
the current labor force. Since last August, Georgia has lost 6,137 people from its
labor force, while the U.S. has added over 1 million.
Other economic indicators tend to show that the state is
gaining population and workers, not losing them, so it is logical to assume
that the true number of people who could be included in the labor force is
growing at least at the same rate as the nation if not faster.
If the state’s labor force was growing at the same rate
as the nation, August’s unemployment rate for Georgia would be at 6.5%.
This rate is more consistent with the evidence showing in
the nonfarm jobs report also issued this week by the Bureau of Labor
Statistics.
Nonfarm Employment grows modestly
Georgia recorded a modest 2,200 increase in August and
reported 83,200 jobs over the year. The numbers translate into a 2.0% annual
increase, slightly below the nation’s 2.1% job creation rate.
Over the past three months, Georgia has averaged 8,600
new jobs each month. As a comparison, the state recorded an average of 39,200
jobs for the comparable period in 2014.
The slowing rate caused Georgia to drop again in the state
rankings of job creators. In June, the state was 6th best in the nation, in
July it dropped to 8th place, and in August it now stands at 9th position.
In August, states adding more jobs than Georgia over the
12 months included (in order of number of jobs added): California, Florida,
Texas, New York, North Carolina, Washington, Michigan, and Massachusetts.
Slowdown in
Atlanta MSA offset by higher growth in rest of State
The slower growth rate for the state is directly attributable to the lower rate of job growth in the Atlanta area in August.
Last month, the Atlanta metro area added only 600 of the
2,200 new jobs recorded statewide. This is a remarkable turn for the Atlanta
area, which had been the main driver of job growth over most of the previous 11
months.
For the three months ending in August, the Atlanta area
lost 2,100 jobs compared to a loss of only 700 jobs for the same period in
2014.
Over the past 12 months, the Atlanta metro area has accounted
for 69,800 of the 83,200 new jobs created in Georgia, or almost 84% of the
state’s new jobs for an area that is home to almost 61% of the state’s
employment.
In the Atlanta area, the noticeable slowdown in August
was in the sector that is seen as Atlanta’s growth engine – Professional and
Business Services. This sector includes engineering, accounting, and consulting
firms; but it also includes employment agencies (temporary and permanent
employment), which also showed slowing in August.
It is possible this is a one-month aberration due to a
statistical or survey anomaly, but it will be worth watching over the next two
months to see if the slowdown continues or will be wiped away by revisions in
the data.
