Like a tired driver with a fresh jolt of caffeine, the Georgia economy punched the gas in June and powered to a strong month of job growth and the lowest unemployment rate since the fall of 2007.
The state added 27,400 jobs, while the jobless rate slipped from 4.9 percent in May to 4.8 percent in June, the state Labor Department reported Thursday. That job growth was more than double the average of the past five Junes.
The acceleration came after two consecutive months of job losses.
“The economy is very strong,” said Karyn Cavanaugh, senior market strategist for Voya Investment Management, which manages investments for individuals and institutions. “Month to month numbers can be misleading, but from 30,000 feet up, Georgia is doing pretty darned well.”
Growth came from across the economy, although several blue-collar sectors unexpectedly declined.Construction lost 4,000 jobs, while manufacturing dropped 3,000 positions.
But unemployment rate dipped to the level of September 2007, when recession was still several months away.
The Georgia economy has added 122,600 jobs in the past year. The jobless rate is down from 5.3 percent a year ago, despite an additional 135,000 workers in the labor force. And while Georgia’s unemployment rate is still above the U.S. rate jobless rate – as it has been since 2007 – job growth has been more rapid in Georgia than nationally.
“Georgia’s unemployment rate is the lowest it has been in almost 10 years, because our employers continue to create jobs and put record numbers of people to work,” said Mark Butler, the state labor commissioner.
The state’s labor market economy has grown for seven years. During that time, the jobless rate has fallen from double digits and the number of officially unemployed has likewise been cut in half.
Still, 240,923 Georgians are jobless and looking for work. Nearly one-third have been looking for more than six months.
Some in the Federal Reserve have said they want to raise interest rates, arguing that the low unemployment rate shows the economy is close to full employment. A bidding up of wages would then spark a run of higher prices, according to those inflation “hawks.”
However, the rise in metro Atlanta wages has been modest.
“The wage growth question has been a conundrum,” Cavanaugh said. “We have a lot of slack in the labor force that is not showing up in the unemployment numbers.”
Part of the mystery is in labor force participation – that is, the share of the working age population that is either working or looking for a job.
The most recent number is 63.1 percent, according to the Bureau of Labor Statistics. That is far below the levels during the height of the 1990s boom, when participation peaked at 69.6 percent in Georgia.
If the same share of people were working now as in 2000, there would be more than 500,000 more people in the labor force.
Economists cite several factors in the participation decline. They include early retirements, discouraged jobseekers who have given up and a growing underground economy in which people work for cash and tell the government they are not working.
Another possible factor is drug users who cannot pass tests or hold onto jobs when they do – though there isn’t conclusive data.
“We have way too many people who have dropped out of the labor force for drug-related reasons,” said economist Jeff Korzenik of Fifth Third Bank. “We have never had anything like the opioid epidemic hit the labor force.”
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