Georgia job growth underwhelming to start the year

Georgia’s labor market is treading water, according to new data released Thursday by the state Department of Labor.

Georgia added 1,200 net jobs in January, basically flat from December, according to the report, the first glimpse at how the state labor market is performing this year.

The state’s unemployment rate held steady at 3.5% in January, unchanged from December, and remains below the national rate.

“I think the numbers are a little disappointing,” said Mark Vitner, chief economist of Piedmont Crescent Capital, a longtime analyst of the regional economy.

“Georgia has been one of the fastest-growing states for the last few years and continues to do very well in terms of economic development,” he said. “But job growth has just softened all across the country.”

Vitner framed it as “a slow hire, slow fire” economic situation, where companies are hiring fewer people and workers are holding on to jobs, leading to less turnover.

Federal jobs down, but private sector better

Although employment remains positive over the year, the pace of growth is weak. Georgia added 9,300 jobs over the 12 months that ended in January, growing just 0.2%.

A major drag was the loss of 12,500 federal government jobs in Georgia over the year as President Donald Trump slashed workers at agencies, including the Centers for Disease Control and Prevention, a major metro Atlanta employer. State and local government employment grew, however, adding a combined 5,700 jobs over the year.

Stripping that away, the private sector added 16,100 jobs over the 12 months to January, up 0.4%, a growth rate that’s a little better than national results, Vitner said.

“Treading water is not where Georgia is used to being,” he said. “Georgia is used to outperforming the U.S. economy by a sizable margin.”

Part of what’s going on, he said, is the nature of the economic development investments in Georgia. The state has been a target of data center developers, which bring billion-dollar deals but few jobs.

“So we have a very capital intensive, job-light economic environment,” he said. “Data centers don’t employ a lot of people. Even the manufacturing facilities that we’re adding tend to be more capital intensive and employ fewer workers per dollar of output than we’ve seen in the past.”

In January, Georgia saw job gains in retail trade, health care, construction, and transportation and warehousing.

The sectors with the biggest losses were administrative and support services, wholesale trade, information, durable goods manufacturing and the federal government.

But Vitner noted “there’s a lot of noise on a month-to-month basis, and January is a difficult month to read,” because there are normally job cuts after the holiday season.

The Iran war is a wild card

Looking ahead, it’s conceivable the U.S. and Israeli war in Iran could affect the job market, Vitner said. The war started at the end of February.

The conflict has driven up gas prices, and in a heavy commuter region like metro Atlanta, that could have a bigger impact on consumer spending, which ultimately could slow hiring in strong sectors like restaurants and entertainment, he said.

“If folks are getting squeezed, then I think that’s going to keep pressure on the labor market, and we’re going to see weak job growth throughout much of this year,” Vitner said.

The view of the state’s labor market should become clearer in coming weeks. The Georgia Department of Labor is set to release February employment data on April 16, and March data on April 30.

Layoffs this year

Several layoff announcements have made headlines this year in Georgia.

In late January, Atlanta-based UPS said it would cut about 30,000 workers. Vinings-based Home Depot also announced it would eliminate about 800 corporate positions, mostly affecting remote workers.

More recently, consulting firm Accenture said it would cut 54 Buckhead-based workers because of a “change in client contract requirements,” according to a state filing this week. Accenture didn’t respond to a request for comment.

Tyson Foods also recently said it would close a plant in Rome, affecting 168 workers.

Vitner said the layoffs would take some time to work through the data. “As long as you’re receiving severance, you’re still technically counted as employed in these numbers,” he said.

But he did note that the number of first-time unemployment claims is down over the year in Georgia. The state Department of Labor reported initial unemployment claims were up nearly 4% in January, but decreased almost 20% year over year.

Meanwhile, wage growth is still increasing but at a slower pace.

The average worker’s raise the past three months has been 3.7%, according to February data from the Federal Reserve Bank of Atlanta’s wage tracker. That wage growth is still outpacing inflation, but is down about 14% from a year ago.