X

UPDATE: Georgia unemployment fell in June, but claims continue surge

While sectors like hospitality have been savaged by pandemic-triggered job cuts, hiring has continued at companies that make, handle, warehouse and deliver goods that people need. (AP Photo/Patrick Semansky, File)
While sectors like hospitality have been savaged by pandemic-triggered job cuts, hiring has continued at companies that make, handle, warehouse and deliver goods that people need. (AP Photo/Patrick Semansky, File)

Nearly 140,00 jobless claims last week; June unemployment rate 7.6%

Georgia’s unemployment rate dropped to 7.6% in June from 9.4% in May amid continued rehiring in many sectors that had largely shut down in early spring, the Department of Labor said Thursday.

But there are still far fewer jobs than before the coronavirus outbreak, and claims for jobless benefits continued at historic highs last week, suggesting a robust economic recovery could be a long way off.

Last month saw a dramatic rebound in the size of the labor force, while the economy grew by 150,200 jobs.

“June was the first month to show positive numbers in all major indicators since the pandemic started,” said Mark Butler, the state’s labor commissioner.

A large swath of the state’s economy was on hold during much of March and April, with Gov. Brian Kemp lifting many restrictions in May. The “reopening” of the economy meant many workers returning from furloughs, a trend that continued in June.

In May and June, half of the jobs lost in April were gained back, Butler said.

However, he urged perspective: Even after June’s robust growth, the state had 239,800 fewer jobs than in June of 2019 and a labor force that was smaller by 168,917 from a year ago.

More ominously, the rise of coronavirus cases in Georgia has shaken the confidence of many companies. During June, the state processed 607,851 new claims for unemployment insurance, and they have remained at high levels in July. Meanwhile, the $600-a-week in federal emergency payments to jobless workers will end this month, unless Congress takes action.

Butler warned the recovery could be bumpy. “Although it is nice to see the pendulum move in the right direction, we are not naïve to the fact that we may see another tick up in claims over the next few months.”

Delta Air Lines said Thursday it remains overstaffed despite thousands of voluntary buyouts. AJC file photo
Delta Air Lines said Thursday it remains overstaffed despite thousands of voluntary buyouts. AJC file photo

The national unemployment rate last month was 11.1%.

In Georgia alone, the Department of Labor has handled more than 2.8 million jobless claims since March, judging 1.3 million as valid and paying benefits to 1.1 million people.

Last week, the state processed 138,452 claims, up 34,862 from the prior week. Officials said that claims typically rise after the week of July 4, but the sharp rise this time raised suspicions and they are investigating the possibility of fraud.

At least until now, officials have said fraud has been a minor issue.

The continued flood of jobless claims reflects ongoing hemorrhaging in some parts of the economy, especially in hospitality, retail and travel.

Atlanta-based Delta Air Lines said Thursday it remains overstaffed even after 17,000 employees agreed to take buyouts and early retirements. Delaware North told state officials in the past few weeks that it will lay off more than 1,000 people at the Battery, the entertainment zone around the Atlanta Braves stadium. JC Penney announced Wednesday it would cut 1,000 jobs nationally and close 152 stores, including stores in Athens, Gainesville and Northlake Mall in Atlanta.

Retail overall will not recover its lost jobs until 2024, according to ThinkWhy, a Dallas-based software company that analyzes salary and labor market data through its platform LaborIQ. It estimated leisure and hospitality in metro Atlanta will not recover all its lost jobs until nearly 2026.

And while some sectors have improved, the rebound is limited — by consumer reluctance to spend, by new rules for doing business, by anxiety about the near future.

“I don’t think we will see a complete recovery until mid-2021,” said Kip Wright, chief executive of Talent Path, a staffing company that trains and places techies.

Pre-pandemic, Talent Path had a couple hundred people on assignments in metro Atlanta. While about 10% of those jobs were lost, tech jobs are in higher demand than other white-collar work, he said. “Companies are saying, ‘Hey I’ve got some projects I need to do and technology is key.’”

Some tech skills in demand for Atlanta companies help their transition to the post-pandemic economy, said Kip Wright, CEO of a staffing company. (photo contributed)
Some tech skills in demand for Atlanta companies help their transition to the post-pandemic economy, said Kip Wright, CEO of a staffing company. (photo contributed)

Credit: Contributed

Credit: Contributed

In many sectors, customers are now much more reluctant to make a visit, and that puts a premium on data analytics, Wright said. “A lot of companies have to figure out what kind of companies they are, how to get more targeted in their marketing, how to better target their customers as they shift into a digital environment.”

In Georgia, the hardest hit sectors have been hospitality and health care. The past month has seen the reopening of many restaurants — even if they are not offering full dine-in services — so at least some staff has been called back to work. Likewise, many doctors and dentists offices have staffed up to again to offer non-emergency care.

Norcross-based Georgia Furniture Mart has opened a new distribution center in Tucker during the pandemic and seen a significant increase in online and in-person interest, according to a spokeswoman. The retailer had nearly 160 employees in February, furloughing nearly all of them doing the shutdown. They have brought 135 workers back.

Manufacturing, which accounted for 402,400 workers in February, lost about 20% of those jobs during the shutdowns, said Roy Coan, president of the Georgia Association of Manufacturers.

“Most manufacturers are recalling employees right now,” he said. “But manufacturers do not have the same capacity as before. I would say we are still off about 10% in employment, though it varies by sector.”

The state has more than 400,000 people officially unemployed – that is, out of a job but still looking for work.

Employ Georgia, the Department of Labor’s job site, had about 89,000 listings during the month of June.

However, the trend is not good, said Daniel Zhao, chief economist for Glassdoor, which tracks job listings across the country: During the past two weeks, job openings for the state were down 1.1%. Job openings dipped in all 50 states.

This “reveals a recovery losing steam,” Zhao said. “The sudden drop in job openings amid rising COVID-19 cases is an alarming and humbling reminder that the virus is firmly in the driver’s seat.”

Georgia unemployment rate

Feb.: 3.1%

March: 4.6%

April: 12.6%

May: 9.4%

June: 7.6%

Source: Georgia Department of Labor

____________

Georgia’s labor force

May to June: up 31,100

June 2019 to June 2020: down 168,917

Source: Georgia Department of Labor

_____________

Jobs in Georgia

May to June: up 150,200

June 2019 to June 2020: down 239,800

Source: Georgia Department of Labor

_____________

Unemployment claims

Week ending

May 2: 228,352

May 9: 242,772

May 16: 177,731

May 23: 165,499

May 30: 149,163

June 6: 135,254

June 13: 131,997

June 20: 125,725

June 27: 117,485

July 4: 103,590

July 11: 138,452

Sources: Georgia Department of Labor, U.S. Employment and Training Administration

____________