Economist: Georgia's job losses to grow until 2010

Holiday lights may be going up, but the economic gloom will only deepen in coming months, predicted Rajeev Dhawan, director of the Economic Forecasting Center at Georgia State University.

Georgia and metro Atlanta are linked to a national economy that will struggle through the next year before making only a modest recovery late in 2010, he said, speaking Wednesday at the center’s quarterly conference.

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Rajeev Dhawan, director of the Economic Forecasting Center at Georgia State University.

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“This is not a recession that is going to be deep, but it is going to be long,” he said. “Job losses will intensify.”

Real estate, which was crucial to Atlanta’s expansion, has been badly battered. The fall in sales hurt homeowners and brokers, while the chill in new building has eliminated thousands of jobs.

Among signs that more damage will be done was a Census Bureau report Wednesday that showed residential construction slowing once again.

It was the slowest monthly reading since the agency started collecting data in 1959, according to economist Celia Chen of Economy.com.

Meanwhile, a signal of plans for future construction was flashing red: the Architecture Billings Index plunged Wednesday to its lowest level since the survey began in 1995.

Weakness has spread from consumers and companies to governments and agencies that cannot get financing, said Kermit Baker, the chief economist for the American Institute of Architects, which compiles the index.

There are already three unemployed Americans for each job opening, according to the Economic Policy Institute. About 189,000 people have exhausted unemployment benefits without finding jobs and more than 1 million more will get their final unemployment check between now and New Year’s, EPI reported Wednesday.

Georgia is unfortunately caught in the national current.

By the end of 2008, the state will have lost 75,100 jobs — more than one-third of them “premium,” jobs that pay more than $47,000 a year, Dhawan said.

From the start of the job cuts to the end of 2009, Georgia payrolls will bleed a stunning 170,000 jobs — 4 percent of the total, he said. Most sectors have been hemorrhaging jobs.

Among the hardest hit are jobs near the core of the economy’s troubles: the real estate slump and the financial crisis. Moreover, the global slowdown is undercutting manufacturing while falling tax revenues are forcing government cuts.

Government reports show some retail positions being added, but the pullback in consumer spending makes that data somewhat suspect.

The only growing category is that of education and health services, Dhawan said. “We are running on just one single cylinder.”

Metro Atlanta, which accounts for about two-thirds of the state’s jobs, will likewise account for the majority of this year’s job losses, he said: about 45,600 lost jobs.

It will lose 42,100 jobs next year before adding a modest number — 17,200 positions — in 2010, he said.

Paralleling recessions of 1990-91 and 2001, the current downturn will be followed by an expansion that does not bring job growth, Dhawan said.

In his conference a year ago, Dhawan predicted that the economy would skirt recession. But he was hardly alone: few of the nation’s mainstream forecasters were predicting a significant downturn.

But then in late spring, gas prices leaped to record heights. A few months later, the real estate meltdown set off a series of financial crises — led to massive government intervention in the financial system and a dizzying slide in the stock market.

The storm in the financial markets threatened to shutter lending from bank to bank and ultimately, from bank to consumer.

Unchecked, the effects could be disastrous, Dhawan said. “Less credit means less investment, which means less income tomorrow. Everything starts with the grease that makes the economy work: credit.”

From here, the economic trajectory also depends on how much of a tailwind it gets from the expected government stimulus next year, said Chris Dardaman, chief executive of Brightworth, an Atlanta-based wealth management firm.

“And that will take a quarter or two to kick in,” he said. “We expect unemployment will continue to rise for awhile and peak out between 7 and 8 percent next year.”

Georgia’s unemployment rate was 6.5 percent in September. The state’s rate for October is to be announced Thursday by the state Labor Department.

Comments

By Sherry

Nov 20, 2008 8:35 PM | Link to this

Posted by BeyondGreen

Electric cars would cost the equilalent of 60 cents a gallon to charge and drive. The electricity could be generated from solar or wind sources.Fossil fuels are finite. We are using oil at twice the rate we are discovering new oil. We need to get on about the business of becoming energy independent and using alternative sources of fuel. The high cost of gas this past year seriously damaged our economy and society. While we are doing the happy dance around the lower prices at the pumps OPEC is planning further production cuts to drive prices back up. We have the knowledge, we have the technology, what America lacks is a plan. Jeff Wilson has a new book out that is beyond awesome. The Manhattan Project of 2009 Energy Independence NOW. He walks you through every aspect of oil, what it is used for besides gas, our depletion of it. The worlds increased need ie 3rd world countries becoming more modernized and consuming more. He explains EVERY alternative energy source and what role they can play to replace oil. His research is backed up with hard data and even includes a time frame and proposed legislative agendas to wean America off oil. www.themanhattanprojectof2009.com

By Sherry

Nov 20, 2008 8:33 PM | Link to this

Electric cars would cost the equilalent of 60 cents a gallon to charge and drive. The electricity could be generated from solar or wind sources.Fossil fuels are finite. We are using oil at twice the rate we are discovering new oil. We need to get on about the business of becoming energy independent and using alternative sources of fuel. Green energy would create millions of badly needed new jobs. Its a win -win situation. The high cost of gas this past year seriously damaged our economy and society. While we are doing the happy dance around the lower prices at the pumps OPEC is planning further production cuts to drive prices back up. We have the knowledge, we have the technology, what America lacks is a plan. Jeff Wilson has a new book out that is beyond awesome. The Manhattan Project of 2009 Energy Independence NOW. He walks you through every aspect of oil, what it is used for besides gas, our depletion of it. The worlds increased need ie 3rd world countries becoming more modernized and consuming more. He explains EVERY alternative energy source and what role they can play to replace oil. His research is backed up with hard data and even includes a time frame and proposed legislative agendas to wean America off oil. www.themanhattanprojectof2009.com

By Kevin

Nov 20, 2008 9:17 AM | Link to this

Hi Deborah,

Two words: Wealth Envy.

Look it up. Then proceed to get over yourself.

By mustardseed

Nov 20, 2008 8:46 AM | Link to this

After looking at the dismal economic figures showing Georgia's 7% unemployment rate (the highest since 1992), I guess people will be lining up in droves to get the ultimate chance of being a full-time caddy for the venerable Senator Saxby Chambliss. Fore!!! Please vote Jim Martin!

By StopOutsourcing

Nov 20, 2008 1:39 AM | Link to this

deborah, you blame the upper class for doing exactly what this country stands for. People who work hard reap the benefits of their efforts. When you start handing things out to everybody, you teach the poor not to bother to work and you demotivate the upper class so that they don't want to work because they don't get to keep what they rightfully earned. I'm not upper class, but I do agree with their right to keep what they have earned and not hand it out to people who have done nothing to deserve the handouts. America was created so that everybody could have the ability to improve their situation. Socialism just doesn't work and is totally against what our founding fathers intended. Don't hand the poor a fish --- teach them how to fish, instead.

By deborah

Nov 19, 2008 9:34 PM | Link to this

MAYBE THINGS WILL NOT GET BETTER BUT WE MUST NOW LEARN TO STAND TOGETHER AS A FAMILY NOT AS ONE PERSON OUR GOVERMENT DON THIS TO US AND FOR WHAT ? iF OUR FOURFATHER'S MADE IT SO CAN WE . WE WILL SURVIVE.WE THE MIDDLE CLASS HAVE LEARNED TO DO WITHOUT THE FINNERTHINGS NOW THE UPPERCLASS MUST HAVE A CHANCE TO SEE WHAT IT IS LIKE.NOW TURN YOUR HEADS WHEN YOU WALK DOWN THE STREETS YOU THINK YOU HAVE EVERYTHING.BUT WE AS A FAMILY HAVE PRIDE AND NOW WE CAN STAND TOGETHER.AND BE AS RICH AS YOU.OUR GOVERMENT CONTUINE TO PLAY THERE GAMES AND FOR WHAT REASION? THEY ARE TRICKING US NOW BY LOWERING GAS PRICES SO WE WILL KEEP SPENDING WAKE UP AMERICA DON'T FALL FOR IT

By SAXBY

Nov 19, 2008 4:42 PM | Link to this

Keep electing good ol boys.

By StopOutsourcing

Nov 19, 2008 1:01 PM | Link to this

The many large companies in Atlanta are laying off many people. Guess where all those jobs are going? Overseas. It's time for Americans to start protesting about these loss of jobs. Don't buy from companies that foster overshore employment. It will make it harder to find somebody to do business with but once their wallets start hurting, maybe corporate America will get the picture.

By david wayne osedach

Nov 19, 2008 12:39 PM | Link to this

I am afraid that 2009 will be incredibly bleak for the economy and that un-employment will soar to 10%. It is prudent to spend carefully and hold off on major purchases.