Atlanta adds jobs, but unemployment up

Metro Atlanta finished 2018 with stronger job growth than the year before, adding 69,300 across a range of sectors, according to a report released Thursday by the Georgia Department of Labor.

The region had a better than average December, with 8,600 new jobs in play. That capped a year in which strong gains came in a range of sectors, from low-paying hospitality work to high-paying corporate and tech positions. About 60 percent of the jobs were in metro Atlanta.

"You can look out of my window in our office in Buckhead and see construction cranes all over the skyline," said John Koenig, Atlanta managing partner for Barnes & Thornburg, a national law firm. "So, overall, I'm optimistic."

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But the news wasn’t all good.

The unemployment rate in Atlanta rose last month to 3.4 percent from 3.0 percent in November. Although that is still a fairly low rate, the increase was the largest for any December since 2008, when the economy was plunging deep into recession.

Yet unlike that month – when the economy was shedding tens of thousands of jobs – the rate this time didn’t rise because of layoffs, according to the labor department. The number of new claims for unemployment insurance last month was slightly lower than a year ago.

Instead, the rate bumped up because the metro labor force grew by more than 21,000 workers – much faster than hiring. An increase like that is sometimes seen as a good sign, the result of a strong economy pulling people off the sidelines.

If that is the case, and the economy keeps growing, economists expect the unemployment rate to stabilize or drop. But it likely won’t happen right away: January is virtually always a month of job losses, as retailers and distributors shed positions they added for the holiday season.

Moreover, the economy may be facing some turbulence.

There are trade battles, tariffs, interest rate increases, stock market volatility and, now, an ongoing government shutdown . The combination that makes predictions hard, Koenig said. "I have a lot of clients that are in manufacturing or who buy steel, aluminum, raw products. People are concerned about making big international investments," he said.

Jobless claims are probably going to be higher this month. First because of seasonal layoffs, but also because of the government shutdown.

The shutdown, which started in late December, has meant missed paychecks for thousands of Atlanta households – both federal employees and contractors. Small businesses have been unable to arrange loans they need to expand. And some farmers are waiting for help recovering from last year's storms and readying this year's planting.

Few economists are predicting a recession, but a lot depends on how fast the shutdown is resolved.

After a nine-year expansion, the economy's fundamentals still seem sound, said Andrew Murphy, senior investment adviser at Atlanta-based GENCapital, a wealth management company. "There's nothing that says one thing is going to just blow the doors off the economy. But uncertainty, in my opinion, that is the key thing to watch."

Worry makes people less likely to do the kind of spending that expands companies and adds to the economy.

For example, Murphy works with an entrepreneur who owns resort property and has been debating whether to develop it or sell. Land prices have been climbing, but he is worried that is coming to an end.

He’s probably going to sell, Murphy said. “The moral of the story is, he thinks there’ll be a slowdown in real estate. There’s an opportunity cost – he can take his money and do something different with it.”

Number of jobs added to metro Atlanta economy, by year

2007: 18,700

2008: -87,800

2009: -118,000

2010: 22,600

2011: 42,000

2012: 49,300

2013: 78,100

2014: 104,100

2015: 70,700

2016: 78,300

2017: 43,100

2018: 69,300

Sources: Bureau of Labor Statistics, Georgia Department of Labor

Metro Atlanta unemployment rate, December

High, 2009: 10.4 percent

Low, 2000: 2.6 percent

2018: 3.4 percent

Sources: Bureau of Labor Statistics, Georgia Department of Labor

Increase or decrease in the unemployment rate, from November to December, typically period of highest employment

2007: 0.5 percent

2008: 0.7 percent

2009: 0.1 percent

2010: -0.2 percent

2011: 0.2 percent

2012: 0.3 percent

2013: -0.1 percent

2014: -0.2 percent

2015: -0.1 percent

2016: 0.1 percent

2017: 0.0 percent

2018: 0.4 percent

Sources: Bureau of Labor Statistics, Georgia Department of Labor