The divide widens
Metro Atlanta got battered more than the rest of the country during the Great Recession, suffering an unemployment rate of 10.6 percent at its height, compared to a peak of 10 percent for the U.S. The gap shrank through 2014 as the Georgia economy slowly picked up momentum. Then in June, the gap began growing again. Economists are puzzled as to why Georgia’s jobs climate has seemingly worsened compared to the nation’s. But they say they want a few more months of data before hitting the panic button.
Metro Atlanta’s unemployment rate in July climbed back to 8 percent, rising from 7.6 percent in June and triggering worries about the region’s economic recovery.
Five years and a month after the official end of the recession, the region is gaining jobs but not fast enough to keep joblessness from rising, according to the state Labor Department. That made this the first July since 2008 when metro Atlanta saw its jobless rate increase from June to July.
The report comes just days after Georgia’s statewide rate rose to 7.8 percent, landing it at No. 50 out of 51 states and the District of Columbia. Metro Atlanta’s rate is also high among major cities.
Nearly a quarter of a million people in metro Atlanta are out of work and looking for a job, Thursday’s report showed.
Mark Vitner, senior economist at Wells Fargo, said he’s puzzled. “It really doesn’t seem like the economy has lost that much momentum. I just don’t know that there is one answer to this.”
Even with the uptick in recent months, the rate is down from 8.3 percent in July 2013. Since then, the economy has added 63,900 jobs.
Evidence of improvement is in the cranes and bulldozers as new commercial projects go up, as well as the sound of hammers for new home construction.
The private sector added 8,900 jobs in July, despite layoffs in manufacturing and retail. Those gains were offset by losses in government and schools. Overall, metro Atlanta lost 2,700 jobs.
State officials have blamed the summer jobless rate increases on the effect of seasonal school system layoffs. Some say the state’s growing job market is drawing job seekers, which can initially inflate the unemployed ranks and push up the rate.
Economists will be closely watching the next few months’ reports to see if school rehirings and job growth brings a quick decline and an improved national standing.
Most economists contacted this week by the AJC said they are hesitant to judge based on a few months of data. Moreover, the unemployment rate is notoriously volatile: It can go down when a bad economy discourages people from looking for work. It can go up when a stronger economy entices people back into the job search.
In the past five months, the metro Atlanta labor force — the number of people employed or actively seeking work — has grown by roughly 40,000 people, the state reported. That number is derived from monthly federal surveys.
Whatever the cause, metro Atlanta’s relatively high rate can hurt the region’s image, said Rajeev Dhawan, director of the Economic Forecasting Center at Georgia State University.
“The difference between the national and the local unemployment rate is a big predictor of net in-migration – that is, whether people will keep coming to an area like ours.”
The U.S. rate is 6.2 percent.
Atlanta suffered more from the recession starting in late 2007 than most – mainly because it was so badly hurt by the burst of the housing bubble. Unemployment peaked in early 2010 at 10.6 percent.
Miami, which peaked at 11.9 percent unemployment, was down to 6.3 percent in June, the last month available. But Las Vegas, which had peaked at 14.5 percent joblessness before making dramatic improvement, saw its rate rise in July from 7.9 to 8.2 percent.
Among the nation’s 50 largest metro areas, Atlanta had the fifth-highest jobless rate in June. July comparisons aren’t out yet.
The Atlanta rate had slipped to 6.5 percent in April and some forecasters expected the Atlanta rate to catch the national rate. But then came the three consecutive months of increases.
People are still finding jobs, though not necessarily permanent or full-time.
Erica Parks, 36, an Army veteran who served in Afghanistan, had been without a job for three years and had applied for hundreds before Emory University called in July to offer a research job. For the past month, she’s been interviewing inmates at Fulton County’s jail about their HIV status, information used to link them with care.
She has a one-year contract and when it ends, she hopes to find other positions with Emory. “Once you are in the door, you are in a good position.”
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