SLOWING JOB GROWTH
U.S.
February: 233,000, 0.2%
March: 186,000, 0.1%
April, 123,000, 0.1%
May, 38,000, 0%
Georgia
Feb., 16,300, 0.4%
March, 14,200, 0.3%
April, 10,600, 0.2%
May, (to be announced Thursday)
Sources: Bureau of Labor Statistics, state Department of Labor
Thursday’s state unemployment report could be the most telling in a while.
Hiring across both the nation and Georgia has steadily slowed this year, and May’s national number of just 38,000 new jobs fueled worries of a broader downturn.
In Georgia, employers added 16,300 jobs in February, followed by 14,200 in March and 10,600 in April. If the state tracks the national trend, the May number for Georgia job growth could be weak.
“We have had five straight years of increasing job growth. That is behind us,” said Jeff Humphreys, director, Selig Center for Growth, University of Georgia.
Yet there is some good news behind that.
Wages are rising a bit more robustly than in a long time. And though job growth has slowed, Humphreys still expects the state’s pace to be faster than the nation’s.
The state jobless rate is also down from a year ago, though it has leveled off in recent months. Nationally, the unemployment rate’s decline is at least in part because some jobseekers have given up and are no longer counted as part of the labor force.
In Georgia, the labor force has continued to grow.
Mark Vitner, senior economist for Wells Fargo, cautioned that “seasonal quirks” are part of the reason the national numbers looked bad in May. But gas and oil exploration has continued to decline and manufacturers – a solid presence in Georgia – have been hurt by dropping demand overseas.
“There are some real concerns,” Vitner wrote in an email report.
Eric Schimpf, managing director of the South Atlantic division of Merrill Lynch, said the numbers conflict with what he sees.
“Here on the ground, I would say that the month of May has been one of the best hiring months we’ve had,” said Schimpf, who is based in Atlanta. “We have been in a growth state last year and this year and I expect we will be in a growth state for a long time to come.”
The question is which barometer — recently shaky numbers or strong observations — is more accurate as the economy wobbles through the seventh year of slow recovery.
After two years of virtually unprecedented job losses, job growth in the state started again in 2010. That means that the expansion is now longer than the average post-World War Two business cycle.
But even if the chance of another downturn is rising, it is still well shy of the red zone, Humphreys said.
“It is significant, but the light is not flashing recession. The fundamentals are still pretty solid.”
From the businessperson’s point of view, fundamentals translate to revenues and costs, customer demand and the availability of good workers at fair wages.
Those factors have been solid enough to persuade Geoff Melkonian, already the owner of two restaurants, to open a third at Avalon, the huge mixed-use project in Alpharetta.
“We are in the process of hiring right now,” said Melkonian, owner of the Breadwinner Café in Sandy Springs and Farm to Ladle in the Ponce City Market in Atlanta. “As far as the economy goes, I am not sure I can speak to that. I can tell you that people love to eat.”
Jonathan Clues, vice chairman and founder of StudentBridge, an Atlanta company founded in 2001 in England that does marketing and branding for universities, said there are always concerns about the larger picture.
“I think the economy remains a concern for ourselves and our investors,” he said. If you’ve lived through a few business cycles, you get antsy when the good times seem to go on too long, Clues said. “I just fear that there is something looming.”
Yet his own two-year-old business is doing well, he said: StudentBridge had eight employees at the start of last year and has more than double that now.
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