Georgia’s jobless rate rose for the third straight month in July, as government job cuts offset new hiring by businesses.
The summer upturn, to 8.8 percent in July from 8.5 percent in June, puts the state increasingly at odds with the national trend.
The U.S. unemployment rate dipped to 7.4 percent in July, down from June and the lowest rate of the year. Georgia, whose jobless rate rose well above the nation’s during the depths of the recession, had been narrowing the gap before this summer’s rise.
Jeff Humphreys, director of economic forecasting at the University of Georgia, said Georgia has replaced about 56 percent of the 340,000 jobs it lost during the recession, while the nation has replaced about 75 percent.
“I actually have been surprised that the [state unemployment] rate has stayed as low as it has because the rate of job growth is just not that high,” Humphreys said.
But that is changing, the economist said, with the state’s economy strengthening and people who had “taken themselves out of the game” now re-entering the labor force — a trend that can inflate the jobless rate temporarily.
Georgia’s rate is down from 9.3 percent a year ago, according to the state Labor Department, which announced the July rate on Thursday.
The state’s private sector added 15,800 last month, the sixth straight month of growth in that category, the agency said.
“It’s a very broad-based job growth in the private sector,” Humphreys said. “Even in the industries that were lagging at this time last year are adding jobs this year.”
Federal, state and local governments, however, continued to cut back, shedding about 17,300 positions in July, the state Labor Department said. Some of the cuts were temporary and related to local school districts, the state said.
Tom Smith, a labor economist and finance professor at Emory University, said the housing bust continues to cast a long shadow.
“Even though we are the corporate headquarters for a number of really solid companies, we’re also home to companies that are also very tied to the housing industry that weren’t particularly of part of construction,” Smith said.
Smith said the metro Atlanta economy hasn’t “found a good substitute for those jobs to kind of build us back up.”
Humphreys suggested it may be the housing industry itself that fuels a recovery, with signs of that already growing.
The state added more than 4,000 construction jobs between June and July.
“The new up-cycle for housing began in 2012, it’s getting traction this year, and it’s going to gain additional momentum in 2014,” Humphreys said. “At this point housing is working for the economy and not against it.”
Case in point: Nathan Bonham built million-dollar homes in Alpharetta before moving to Costa Rica when local homebuilding began crumbling in 2008.
Bonham, founder of Bonhambuilt International Design, plans to return to the north Fulton market next year, and he’ll be looking to rehire the framers, painters and sheetrock hangers he once employed.
“We thought we’d be there [Costa Rica] for a year, maybe two years. We are still there and very very busy, but we’re making plans to return to the [metro Atlanta] market next summer,” Bonham said. “The market is recovering.”
Labor Commissioner Mark Butler said the state has seen five consecutive months of year-over-year growth in construction jobs. Even manufacturing, which Butler said lost 209,000 jobs from 1997 to 2010, has seen a gain of 10,000 in the last two years. He expects layoffs tied to government jobs will stabilize for August.
“The biggest barriers we have right now, and this is coming from the mouth of business, is a lot of regulation coming out of Washington, especially dealing the health care law,” the commissioner said.
Among other highlights in Thursday’s state labor report:
* There were about 4 million jobs in Georgia in July, 1,500 fewer than in June but 113,200 more than in July 2012, a 2.9 percent increase year over year.
* The share of Georgians out of work for 27 or more weeks, the so-called “long-term unemployed,” continued to decline as a percentage of total employment — 42.6 percent in July, compared with 44 percent in June and 51.3 percent in July 2012.
* Job gains were greatest in Atlanta (72,000 in July, or 3 percent); followed by Athens (2,000, or 2.3 percent); Augusta (4,400, or 2.1 percent); Macon (1,500, or 1.5 percent); and Gainesville (1,100, or 1.5 percent).
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