The unemployment rate is falling partly because of hiring, but also because fewer people are in the workforce.
— In August 2014, the rate was 7.2 percent and there were 4,738,502 people in the workforce
— In August 2015, the rate was 5.9 percent but the workforce had fallen to 4,732,365
Sources: Georgia Department of Labor, Bureau of Labor Statistics
Georgia’s unemployment rate ticked down to 5.9 percent in August, the first time in seven years it has come in below 6 percent, the state labor department said.
The drop came partly because of hiring, but also because fewer people were in the workforce looking for a job during the month.
Still, after peaking in the wake of the Great Recession at 10.5 percent, breaking below that milestone is considered a hopeful – and long-awaited – signal that the job market recovery has taken root.
When the rate crossed the line going the other direction in mid-2008, the economy was already in recession and staggering toward a cliff. Georgia lost one of every dozen jobs and the unemployment rate soared to 10.5 percent before the rebound began.
Georgia’s rate has been higher than the nation’s for eight years, but it has fallen from 7.1 percent a year ago. In that time, the economy has added 83,200 jobs and the number of employees being laid off has continued to decline, according to the labor department.
Job growth has come in nearly all sectors of the economy except government, with hiring in education, healthcare, leisure and hospitality, financial activities and construction. Professional and business services were flat in August, but they are up 19,100 jobs since last year.
The job market has not kept pace with the growth in population, however. The total number of unemployed is 11 percent higher than before the recession started in 2007. Many other people have taken part-time jobs or positions outside their field.
Bill Fogarty of Alpharetta lost his long-time managerial job in 2010. Since then, he has worked part-time jobs and served as a volunteer while applying repeatedly – and fruitlessly – for a full-time position. He took courses in information technology, hoping new skills would make the difference, but it didn’t get him hired.
“My sense is if you have not done the exact job that companies are hiring for, they are simply not interested,” he said. “One of the few people who explained why they hadn’t hired me said, ‘You are just grossly overqualified.’”
He’s taken a job with a local grocer, stocking shelves.
There are some troubling undercurrents in the data. More than 7,000 government jobs have evaporated since last year. And while private sector job growth has been broad, it has not been deep. In August a year ago, the economy grew by 14,300 jobs, but this August the economy added just 2,200 positions.
Moreover, the job growth of the past year is weaker than it was during the two previous years, suggesting the state economy may be slowing again.
The state has also been overly dependent on metro Atlanta’s hiring, said independent economist Michael Wald, formerly of the Bureau of Labor Statistics.
“While the Atlanta metro area contains 61 percent of the state’s nonfarm jobs, it accounts for 79.8 percent of the state’s nonfarm job growth,” he said. “It shows you how much faster Atlanta is growing vs. the rest of the state, with a few exceptions, such as Savannah.”
Another caveat comes in the math behind the low unemployment rate.
The unemployment rate can fall not only if there are more people working, but if there is a shrinking pool of workers. And in August, there was both.
The number of people in the Georgia workforce has grown in some Augusts – like last year – and dropped in others. And the unemployment rate doesn’t figure in people who have gone back to school, retired, decided to stay home with children or simply given up looking for work.
This August the number of people in the labor force dropped, said Mark Butler, the state labor commissioner. “We did see the amount of individuals in the workforce drop, which is expected. Due to the fact that a lot of individuals are going back to college, going back to school, (people) who had been in the workforce.”
There are now 231,000 fewer Georgians in the workforce than in mid-2008 even though the population has grown. The share of people working in Georgia has fallen more in the past decade than all but three other states, according to an analysis of government data by Atlanta-based Garner Economics.
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