Like a tired driver with a fresh jolt of caffeine, the Georgia economy pumped the gas in June and powered to a strong month of job growth and the lowest unemployment rate since the fall of 2007.
The acceleration came after two consecutive months of job losses, the state Labor Department reported Thursday.
Perhaps the only glaring weaknesses in the report were in blue collar sectors: both manufacturing and construction lost jobs.
But the overall numbers were bright and the longer-term trajectory positive, as the economy added 122,600 jobs in the past year.
The unemployment rate dipped in June to 4.8 percent from 4.9 percent in May. The rate was 5.3 percent a year ago, said Mark Butler, the state labor commissioner.
“Georgia’s unemployment rate is the lowest it has been in almost 10 years, because our employers continue to create jobs and put record numbers of people to work,” he said.
It was more than double the job growth of an average June during the past five years.
Here are some ways to sound smart around the water cooler talking about Georgia’s jobless rate:
1. Forward into the past. Georgia unemployment rate a year ago was 5.3 percent so we have made progress.
During those same 12 months, almost 135,000 people have been added to the Georgia job market. Mostly, they seem to have moved here from somewhere else. But June is typically a month when new graduates are coming out of school and searching for a job.
During June, the labor force rose by 3,397, Butler said.
So, if the unemployment rate hasn’t gone down even farther, it is mainly because there are a lot more people in the labor force, looking for work.
2. Step back, look at the Big Picture. Georgia’s rate is still above the national rate – as it has been since 2007. The U.S. rate jobless rate in June was 4.4 percent.
But the pace of job growth in Georgia continues to be more rapid than that of the national expansion.
3. Sherman, set the Wayback Machine for ... It was a strong June for job growth. During the previous three years, the number of jobs in Georgia grew from May to June by 12,100. This June’s growth was more than double that.
4. Go way-er back than that. During the five previous years, from May to June, the number of jobs in the state grew by an average of 9,300. When things were at their weakest – coming out of the 2007-09 recession – the Georgia jobless rate was 10.5 percent – not including many tens of thousands of people who had simply given up looking for work.
The rate is now back to where it was in September of 2007, when the economy was pretty much humming along and recession was still months away.
5. Remember what unemployed means. There has been nearly seven years of job growth. The number of jobs in the state has increased by a very robust 600,000. Still, in Georgia’s workforce of 5 million people, there are still more than than 240,000 Georgians actively looking for work.
That is far lower than it was during the recession and the aftermath. But a historically high share of the unemployed have been looking for more than six months and that share has not fallen much recently.
Anyone not actively looking for work is not officially counted as unemployed.
6. See the glass half empty. The sectors losing jobs were the two mainstays of decent-paying blue collar work: Construction lost 4,000 jobs and manufacturing dropped 3,000 positions.
7. See the glass half full.
There was growth in leisure and hospitality, which added 9,200 jobs, professional and business services – the corporate sector – which added a solid 8,500 jobs, other services adding 5,700, education and health which grew by 5,600, state and local government, up 2,100 jobs, information, which increased 1,100, logistics, which were up 1,000, and financial services, also up 1,000.
Some in the Federal Reserve have said they want to raise interest rates, arguing that the low unemployment rate shows the economy is close to full employment. A bidding up of wages would then spark a run of higher prices, according to those inflation “hawks.”
However, the rise in metro Atlanta wages has been modest.
“The wage growth question has been a conundrum,” Cavanaugh said. “”We have a lot of slack in the labor force that is not showing up in the unemployment numbers.”
Part of the mystery is in labor force participation – that is, the share of the working age population that is either working or looking for a job.
The most recent number is 63.1 percent. That is far below the levels during the height of the 1990s boom, when participation peaked at 69.6 percent in Georgia.
If the same share of people were working now as in 2000, there would be more than 500,000 more people in the labor force.
Economists have been debating the reasons for those missing workers. Some is pegged to early retirement. Some is linked to people who lost jobs and gave up looking. Some is blamed on the underground economy in which people work for cash and tell the government they are not working.
And some could be because drug users cannot pass drug tests or hold onto jobs when they do – although there isn’t enough dependable data to know.
“We have way too many people who have dropped out of the labor force for drug-related reasons,” said economist Jeff Korzenik of Fifth Third Bank. “We have never had anything like the opioid epidemic hit the labor force.”
The state has its own site for job seekers. Click here http://dol.georgia.gov/find-job
Georgia job growth
Source: Bureau of Labor Statistics
Georgia, unemployment rate in June, percent
Source: Bureau of Labor Statistics
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