Job growth in metro Atlanta will slow this year, especially among companies that rely on international business, according to a report from the Georgia State Economic Forecasting Center.
The overall expansion in the region will continue, with an estimated 52,700 jobs added and unemployment remaining below 4 percent, said Rajeev Dhawan, director, at the center's quarterly conference.
But the economic weakness of many American trading partners – exacerbated by trade battles – will mean that much of the job growth will be in lower-paid sectors like leisure and hospitality.
Modest paychecks leave more households struggling with expenses, Dhawan said. “What matters is the quality of the jobs. You’ve got to have purchasing power.”
Less than one in five new jobs in metro Atlanta pays more than $50,000 a year, he said.
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But even modest-paying jobs are better than layoffs, and there have been increasing worries in recent months that the expansion, which started in mid-2009, might be reaching the end of the line.
Dhawan projected three more years of growth. But he cited several areas where the state’s economy is struggling.
Georgia depends on global trade, which lately has been wobbly. At risk is the state’s manufacturing sector, Dhawan said. “When the rest of the world is not growing, you are not going to be selling them your stuff.”
A recent report showed weaker-than-expected consumer spending late in the year. But Dhawan said the consumer retreat was psychological – the after-effects of a roller-coaster stock market.
“Skittish markets hurt confidence,” he said. “You took a shellacking in October, and you took a double shellacking in December, so you pulled back.”
Adding to concerns were a month-long government shutdown along with lingering fears the Federal Reserve's lifting of interest rates has damaged the economy.
Higher rates tend to chill growth by making it more expensive to borrow money – a tactic used by the Fed when it feels the economy is overheating and inflation is brewing. When the economy is weak, the Fed typically cuts rates.
After nine rate hikes in three years, the Fed recently signaled a willingness to wait and see how the economy performs before moving again.
That patience will last at least until the fall, Dhawan said.
“There might be rate cuts in 2020,” he said. “Not because there will be a recession, but they will dial things back.”
Also speaking at the quarterly conference was John Hunt, president of MarketNsight, which tracks the housing market, a crucial part of the local economy.
The market, which has seen a decline in the number of sales, has been hampered by increasing prices in desirable areas, which can stymie first-time buyers, he said. "The Atlanta housing market will continue to moderate, but not because of no demand."
Georgia job growth
2017: 72,100
2018: 103,500
2019: 78,600*
2020: 64,300*
2021: 56,500*
*Projections
Sources: Georgia State University Economic Forecasting Center, Bureau of Labor Statistics
Metro Atlanta job growth
2016: 79,300
2017: 50,900
2018: 62,400
2019: 52,700*
2020: 42,300*
2021: 40,100*
*Projections
Sources: Georgia State University Economic Forecasting Center, Bureau of Labor Statistics
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