Atlanta jobless rate fell in January as more dropped out of labor force

Credit: Bloomberg

Credit: Bloomberg

The metro Atlanta labor force shrunk in January, driving down the unemployment rate even though the economy lost 44,300 jobs during the month, the state Labor Department said Thursday.

The jobless rate fell to 5.1%, down from 5.8% in December and far below the double-digit unemployment of the pandemic’s early days. But that improvement was due largely to the way unemployment statistics are calculated.

Only those actively seeking jobs, as indicated in questionnaires, are counted. People who have dropped out of the labor force, typically because they retire or become discouraged about job prospects, aren’t counted as in the unemployment stats.

The workforce in January decreased by 30,700, which is about four times the usual January decline.

That said, the start-of-the-year job market is unpredictable because so many seasonal workers leave jobs after the holidays.

The pandemic has wreaked havoc with the economy, causing unprecedented job losses last spring. And the fallout continues, particularly in the service sector.

Nationally, 770,000 new claims were filed for unemployment benefits last week.

In Georgia, 24,700 new jobless claims were processed — more than four times as many as before the pandemic, according to the Department of Labor.

Since the start of the pandemic, about 4.5 million claims have been processed in Georgia. About 450,000 of the state’s residents are currently receiving unemployment benefits.

Most of those people should get the 29-week extension that was part of the American Rescue Plan recently passed by Congress, said Labor Commissioner Mark Butler. “This extension should be seamless for claimants currently receiving benefits.”

However, claimants may need to reapply if they pass the one-year anniversary of filing their first claim, he said.

The metro Atlanta economy grew robustly from May through December, but remains 161,100 jobs shy of the levels from a year ago.

Despite January’s setback, job growth will be strong in coming months, said Joseph Aguinaldo, executive editor of Wolters Kluwer’s Blue Chip Economic Indicators.

A year ago, the metro Atlanta unemployment rate was 3.4%. Although it will take time, that kind of job market will return, Gus Faucher, senior economist at PNC, said in an email. “PNC expects that, by late 2023, the labor market will meet the Fed’s goal of maximum employment.”

Among recent announcements of coming projects by the state Department of Economic Development:

  • PAC Worldwide will build a customized packaging factory in Union City that will add about 400 jobs.
  • Kirchhoff Automotive, an auto supplier, has announced plans for an assembly facility in Lawrenceville that will create 73 jobs.
  • Red Phone Booth and Amalfi Pizza are building a “dual concept” restaurant in Buckhead that will add about 50 jobs.

Metro Atlanta January snapshot

Unemployment rate: 5.1%

Labor force: -30,700

Jobs: -44,300 jobs

Unemployed and looking: 156,160

Metro Atlanta, changes in past 12 months

Unemployment rate: +50%

Labor force: -76,707

Jobs: -161,100

Unemployed and looking: +54%

Source: Georgia Department of Labor