The metro Atlanta jobless rate ticked up in January as the region started the year with the usual post-holiday cutbacks in retail, logistics and hospitality jobs, the Department of Labor said Thursday.
Unemployment edged up to 3.0% in January, still historically low, but up slightly from a revised 2.9% in December.
But whether that is the typical start-of-the-year sluggishness or the first signs of deeper trouble, Atlanta like much of the South, is seeing growth decelerate, said Mark Vitner, chief economist of Piedmont Crescent Capital, a long-time analyst of the regional economy.
“I don’t think we are headed for a recession, but I think growth will be a good bit slower in coming months,” he said.
After the rush of consumer spending, the economy always starts the year with job loss, so assessing the year’s start is a question of whether companies held on to more workers than usual because they expect growth as the year plays out.
And this year’s shrinkage was slightly less than the previous three years, according to Bruce Thompson, the state’s labor commissioner.
Among the month’s biggest losers were transportation and warehousing, which shed 14,700 positions; retail, which lost 10,200 jobs; and hospitality, which dropped by 3,000, according to the Department of Labor. There was also a loss of 5,800 jobs in administrative and support work, which can be connected to holiday-driven positions.
But the longer trend has been positive.
Job growth — in Georgia and nationally — has defied more than a year of fears about the burden of high interest rates imposed by the Federal Reserve in an effort to tame inflation. And while inflation is dramatically down, it is still higher than the Fed’s 2% target.
So, the Fed is expected to hold rates high at least into the summer, which adds to borrowing costs for companies and consumers alike.
Pessimists say that a downturn has only been delayed, and that the Fed’s delay in cutting rates only makes recession more likely. Still, most economists now predict a “soft landing” in which expansion slows, inflation falls to acceptable levels and hiring then accelerates.
The first part of the soft landing scenario has happened.
The pace of hiring has steadily slowed. Metro Atlanta growth during the past 12 months ending in January was about one-fifth of the 111,200 jobs added during the 12 months that ended in January 2023, according to the Bureau of Labor Statistics.
Since January 2023, metro Atlanta has gained 23,700 jobs with expansion in health care and social assistance, hospitality, local government, arts, entertainment and Recreation, and professional services.
Generally, low unemployment means job opportunities for sometimes marginalized workers, like people with disabilities or those who have been incarcerated. It also often means higher wages as employers compete for workers, including those who might historically had more trouble finding jobs.
The average worker’s raise the past three months has been 5%, according to the Atlanta Fed’s wage tracker. Those wage gains outpace inflation.
However, weaker job growth has meant less competition for workers in some sectors and average raises are now 25% less generous than in 2022, according to the Atlanta Fed.
Moreover, one-in-eight workers have not received any raise at all, according to the Fed data.
Which helps explain why, despite so much sustained job growth, some signs of consumer distress are on the rise, like delinquencies on auto loans and credit cards, according to the Federal Reserve Bank of New York.
February jobs data for Georgia will be released next week, with Atlanta’s February numbers coming the week after.
Atlanta’s outlook is hampered by some shifts in the economy since the start of the pandemic four years ago, said economist Vitner of Piedmont Crescent Capital.
“Business travel has been slower. The airport is busy, but it is much more heavily weighted toward leisure travel than it was. Atlanta is also a big convention city, but we are not back to our pre-pandemic form.”
Job market for metro Atlanta
Unemployment rate
February 2023: 3.2%
March 2023: 3.2%
April 2023: 2.7%
May 2023: 3.3%
June 2023: 3.4%
July 2023: 3.2%
August 2023: 3.7%
September 2023: 3.4%
October 2023: 3.4%
November 2023: 3.1%
December 2023: 2.9%
January 2024: 3.0%
Deceleration: job growth, previous 12 months
January 2023: 111,200
February 2023: 95,700
March 2023: 86,200
April 2023: 69,600
May 2023: 65,100
June 2023: 72,900
July 2023: 40,100
August 2023: 43,900
September 2023: 43,500
October 2023: 30,300
November 2023: 37,000
December 2023: 32,800
January 2024: 23,700
January unemployment rate
Highest: 10.9% (2010)
Lowest: 3.2% (1999)
Recent: 3.0% (2024)
Sources: Georgia Department of Labor, Bureau of Labor Statistics
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