Georgia’s jobless rate rose from 8.3 percent to 8.6 percent in June as public sector job cuts outpaced hiring in the private sector, the state reported Thursday.
The unemployment rate, after sliding from the double-digits in the months after the recession, has now edged up for two consecutive months, even though the state’s private employers have continued to hire steadily, if unspectacularly.
Offsetting that growth has been shrinkage in government payrolls: In the first six months of the year, government jobs declined by 11,300. Most of the losses have been from state and local governments and most of those were jobs linked to schools.
“The main headwind facing the economy is the public sector,” said Jeffrey Humphreys, director of the Selig Center for Economic Growth at the University of Georgia.
“The good news is that I don’t think the recovery itself is in jeopary,” he added.
As summer arrives each year, the job market typically shrinks as layoffs hit people whose work depends on schools. Most are on the public payroll, but many are contractors who drive buses or clean buildings.
Officials seasonally adjust the data, trying to account for the summer routine. But when layoffs outpace the average, the jobless rate rises.
In three of the past five years, the unemployment rate rose 0.2 points in June. In the other two, the rate stayed the same.
The jobless rate is probably the most commonly cited economic data point, but it can be misleading – for instance, an increase in hiring can boost the rate because it reflects discouraged workers getting back into the hunt for a job.
However, the June workforce declined slightly, according to the report from the state labor department.
And public sector cutting is not done, said Mark Butler, state labor commissioner.
“We are probably going to continue to see a trend in job loss in the public sector. Budgets have gotten much smaller all the way from state government down to our local government,” he said.
In June, governments at various levels suffered a 10,000-job drop, even as private firms added 9,400 jobs.
The private sector has some momentum.
So far this year, non-government payrolls are up 50,800 position, and 96,900 over the prior 12 months. Layoffs seem to be waning: The number of new unemployment claims in June fell 15 percent from May, and it was 19 percent below the number of claims a year earlier.
So while the economy lost 600 jobs in June, that is far less than the average job loss of 16,500 for that month during the past decade, according to Butler. That makes it, “the best May-to-June job performance we’ve had since 2002,” he said.
One critical component in the Georgia economy is advancing: housing. Construction jobs have increased for four consecutive months, Butler said.
Still, the economy in Georgia remains 564,541 jobs shy of its level at the end of 2007. At the past year’s rate of hiring, it will be more than six years before all those jobs are replaced.
One sign of persistent weakness in hiring is the large pool of long-term unemployed.
The labor department said 181,200 jobseeker in June had been looking for at least six months – an increase of 3,600 people from May. They represented 44 percent of Georgia’s jobless for the month.
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