Georgia jobless rate back to record high

By Michael E. Kanell

The Atlanta Journal-Constitution

It wasn’t far, but it’s sure the wrong direction: The Georgia unemployment rate in December rose to 10.3 percent, matching July’s record high.

That increase, announced Thursday by the state Labor Department, followed four consecutive months at 10.1 percent.

That plateau had seemed evidence of a dismal job market that was, at least, not getting worse. But then last month the number of residents filing for first-time jobless benefits crested above 100,000 for only the sixth time since 1972.

“Triple-digit claims -- that is a warning sign,” said Michael Thurmond, state labor commissioner. “That says the next few months will be difficult.”

During the holiday season layoffs came in some unsurprising sectors -- manufacturing and construction. But cuts also came in retail, he said. “Typically you’d have hiring for retail in December. That did not happen. And they let some people go early. ”

Georgia’s jobless rate is again higher than the national average -- as it has been for 24 of the past 25 months. The national rate last month was 10 percent.

Since the recession began in late 2007, Georgia has hemorrhaged 325,000 jobs -- roughly 8 percent of the total. Metro Atlanta has accounted for about two-thirds of the lost jobs.

Thursday’s report, which is subject to revision, puts the job losses during the month at 18,000 statewide and 11,000 in Atlanta.

About 484,000 Georgians are out of work and looking for a job, outnumbering openings by more than 6-to-1.

But even those grim statistics do not do justice to the pain. About 100,000 Georgians have part-time jobs, but want full-time work.

An estimated 30,000 others have given up looking and are not counted as unemployed -- and that number may be understated, since the workforce has shrunk by 121,257 in the past two years.

“It is the classic discouraged worker syndrome,” said Thomas Smith, labor economist and professor of finance at Emory’s Goizueta Business School. “Two years into the recession, more and more people think, ‘What is the point of looking?’”

If they stop looking, they are not officially counted as unemployed.

That means that the unemployment rate could actually peak when the job situation improves, since hiring would draw discouraged people back into the workforce.

Unfortunately, that moment seems months away at best.

The economy, as measured by gross domestic product, did begin growing again halfway through 2009. But experts have predicted that hiring will lag, even if growth continues.

So recent changes in the jobless rate are probably not evidence of shifts in hiring, Smith said. “It’s a signal that the labor force itself is changing.”

The economy in the second half of 2009 had help from federal stimulus spending. That money bolstered many local budgets and funded local projects and is given credit for helping to shove the GDP into positive turf, but it wasn’t enough to cut unemployment.

Stimulus should continue to be a factor this year, but recovery depends on the private sector getting traction.

With consumers still reluctant to spend and small businesses struggling to get credit from banks, the expansion could be temporary. Fears remain that the economy will start to expand only to slip into a “double-dip” -- like the back-to-back recessions during the early 1980s.

Georgia, for decades a leader in job growth, found itself dependent on real estate when the housing bubble burst in 2007, said economist Emily Sanders, president of Norcross-based Sanders Financial Management. “Georgia’s unemployment rate will probably continue to climb until housing hits bottom.”

Despite several years of slumping sales and a near-halt in building, that bottom might not be reached for another year, she said. “We predicted 11 percent unemployment in the U.S. We think it could go to 11.5 or maybe even 12 percent for Georgia.”