Job growth in Atlanta will slow next year amid turmoil and uncertainty as the Trump administration struggles with trade policy, according to a highly-watched forecast to be released today.
Higher interest rates will also curb consumer enthusiasm for purchase of homes, trucks and cars, concluded the Economic Forecasting Center of Georgia in a report prepared for its quarterly conference today.
Atlanta, which will add about 62,800 jobs this year, will see growth drop to 39,100 jobs next year before a modest recovery in 2018, said Rajeev Dhawan, the center's director in an email. "The main sectors to feel the pinch will be manufacturing and corporate, specifically large companies with international ties."
The state’s economy will add 86,700 jobs this year, he said, but only 54,300 jobs next year.
In some ways, the economic hit will be worse than it appears, since the new jobs will be disproportionately lower-wage positions, he said. “This shift from higher-income positions to lower-earning ones will result in somewhat less stellar personal income growth in 2017 and 2018.”
Just 18 percent of the new Atlanta jobs will be “premium” positions – that is, paying more than about $60,000 a year, Dhawan estimated.
Trump talked during the campaign of expanded spending on infrastructure, and if the new spending is passed, it will likely be at least a moderate spur to growth. But that would require Congressional approval – and the Republican majority have been rejecting that kind of policy for eight years.
However, Trump can make a difference right away in trade policy.
"What sets Trump apart from others is his view on trade deficits, in that they are bad, period," Dhawan said. "And his solution is to impose tariffs, which he can do unilaterally because the Trade Act of 1974 gives him fast-track authority to place tariffs for up to 150 days without congressional approval."
The tariffs might be temporary, he said.
However, higher tariffs would likewise mean a “stronger” dollar, making U.S. goods more expensive overseas while lifting mortgage rates at home, Dhawan said. “All of which would bite into interest sensitive purchases such as housing and vehicle sales.”
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