The Georgia economy is likely to add jobs and cut the state’s conspicuously high unemployment rate in 2015, but without quite gaining the kind of speed needed for a robust recovery and strong wage growth, according to a forecast released Wednesday.
The state should add 71,000 jobs next year — nearly three-quarter of them in metro Atlanta — while the unemployment rate continues to slide slowly downward, the Economic Forecasting Center at Georgia State University predicted at its quarterly conference.
The pace will be slightly slower than this year’s job growth, although it will include virtually every sector except federal government positions, Rajeev Dhawan, the center’s director, said.
“Job growth will be very broad,” he said.
More than five years after the official end of recession, Georgia is still about 224,000 jobs shy of the peak in late 2007. Metro Atlanta is down about 77,000 jobs.
Meanwhile, median household income has likewise not returned to pre-recession levels, in Georgia or nationally, according to government statistics. But the gap should narrow, according to Dhawan: Personal income in Georgia should grow 4.4 percent in 2015.
Georgia’s unemployment rate, which had been consistently lower than the national average for decades, surged past the national rate and has been higher nearly every month since the spring of 2005. It has been among the nation’s highest recently.
While Dhawan predicted a drop in Georgia’s September rate of 7.9 percent to 5.9 percent in two years, he added that will still be slightly higher than the national rate.
The government is due to release the October rate today.
Dhawan discounted the unemployment rate as an accurate measure — as did Gov. Nathan Deal in winning re-election despite the high jobless rate.
“The numbers aren’t cooked,” Dhawan said. But other indicators are better, he said, especially a separate survey on job growth and the state government’s report on tax revenue.
Dhawan is among a number of economists who predict the course of the $17.5 trillion-a-year U.S. economy. At the center’s November conference a year ago, he predicted Georgia would add 77,700 jobs in 2014, slightly better than the expected final figure.
At that time he also predicted Georgia would add 96,700 jobs in 2015, a figure he has cut by 26 percent in his outlook.
That tempered outlook is similar to the recent consensus forecast by members of the National Association of Business Economists. Dhawan’s forecast is slightly less upbeat than that consensus.
Forecasters often miss because of unexpected events: For instance, some economists worried about the effect of the housing bubble in the late 2000s, but virtually none predicted the events that sent the economy into free fall.
Surprises can be good news, too. For example, the drop in oil prices has given the economy some extra fuel and left some money in consumer wallets.
But consumers have not been spending dramatically more so far, Dhawan said. “It is just not in the data.”
Though gas prices have dropped an average of nearly $1 a gallon since early summer, most people view their savings as temporary, he said.
“Eating out at restaurants will get a boost, but you are not going out to buy a $1,000 coat. For anything different, (gas prices) must stay low for a long time.”
On Wednesday, Dhawan said that the greatest potential dangers include a renewed outbreak of Ebola, increased violence in the Middle East, conflict with the Russians or retreat in Chinese growth – as well as political turmoil in Washington, D.C.
All are hard to factor into a forecast, he said.
“I cannot put a probability on these things.”
