Georgia’s unemployment rate rises to 7.5%

It’s not surprising, just worse. The state’s official jobless rate rose again in November, hitting 7.5 percent — its highest level since 1983.

The rate, which climbed from 6.9 percent in October, reflects a steadily weakening job market in which 365,244 unemployed Georgians are looking for work, the Labor Department announced Thursday.

“Job losses are accelerating throughout most of the state’s economic sectors,” said Michael Thurmond, state labor commissioner.

Georgia, which for many years enjoyed a better labor market than most of the nation, has slipped to the other side of the curve during the current year-old recession.

The increase in Georgia has been relentless. The jobless rate has soared 67 percent during the past year, from 4.5 percent. By contrast, the national jobless rate has climbed during the year about half that much.

During that 12-month period, U.S. payrolls have lost nearly 2 million jobs, roughly 94,400 of them in Georgia, Thurmond said.

“I think we are getting hit worse than the rest of the nation,” Thurmond said. “It’s manufacturing, it’s housing, and the connection between the two is carpet.”

Dalton, the center of the state’s carpet and textile businesses, has consistently reported the most painful job losses. The area lost more than 4 percent of its jobs in the past year, compared to a 2.7 percent loss in metro Atlanta.

Only health care, education and government have been immune thus far.

But that could change in the new year as governments and schools cope with sliding tax revenues — especially for real estate, Thurmond said. “Clearly, you can see this is a wave that is heading our way,” he said.

Health care is not invulnerable, either, if the downturn is dramatic enough, said Govind Hariharan, chair of the economics department at Kennesaw State University’s Coles College of Business.

“There will continue to be a need for health care,” he said. “Their ability to fund expenses, however, will be hampered.”

Real estate first dragged the economy into recession after an unprecedented surge of homebuilding and buying crested and crashed. Millions of foreclosures followed.

The unfolding crisis shook — or shattered — major lenders that had invested billions in poisoned mortgage packages.

Adding to the toxic mix were record energy prices.

The results were paralysis in high-stakes lending, a prolonged slide in the stock market, job cuts and a consumer retreat.

Several factors might help speed recovery.

First, the government’s mammoth Wall Street bailout may spur more lending.

But the problem is not just bankers’ unwillingness to lend. Consumers account for more than 70 percent of the economy, and — for retailers, especially — their reluctance to spend has been crippling.

But — at least for those who are still working — each drop in the price of energy effectively adds to the spending power of paychecks. Drivers have seen the average price of gas in metro Atlanta plummet from $4.13 a gallon to about $1.55 Thursday, according to AtlantaGasPrices.com.

Also, there is the presumed stimulus package from the new administration, said Hariharan. “There will be money for the states and also for infrastructure, and that will mean hiring.”

Yet there are tradeoffs. Even a bailout of the U.S.-based automobile companies probably will mean a restructuring and job cuts, he said.

Georgia currently has about $1 billion in its insurance fund for laid-off workers. Last month, the state paid $81 million in jobless benefits, payments that max out at $330 a week in Georgia.

The pool of insurance, which comes from taxes on employees and companies, should be plenty to pay benefits to laid-off workers in the coming year, Thurmond said. “But it depends on the depth and the length of the recession, so I am concerned about 2010.”

Unemployment’s worst point typically arrives after a recession is actually over. For instance, the last time the Georgia jobless rate was above the current 7.5 percent was May 1983 — six months after the economy had started expanding.

“If we were coming out of the recession now, then 7.5 percent is not so bad,” Thurmond said. “But we are in it now, and that gives you pause. I am thinking that we could see double digits.”