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UPDATE: Atlanta jobless rate fell in June but still at recession level

The personal service jobs that were shut down during March and April made a comeback in the past two months. The question is whether the renewed fears about the virus will force those kinds of shops to shutter again. (AJC file photo)
The personal service jobs that were shut down during March and April made a comeback in the past two months. The question is whether the renewed fears about the virus will force those kinds of shops to shutter again. (AJC file photo)

Credit: AJC file photo

Credit: AJC file photo

Georgia jobless claims in July suggest economic recovery sputtering

Editor’s note: This article has been updated with additional details and commentary, including last week’s jobless claims in Georgia.

Metro Atlanta’s unemployment rate dropped in June, falling to a still-recessionary 8.6%, as many shops and businesses reopened and rehired workers in hopes of an economic rebound, according to the state Department of Labor.

But Georgia jobless claims remained high last week, darkening the outlook. Other recent data from companies that track business spending and hiring also indicate the recent surge in coronavirus cases is damping the recovery.

Metro Atlanta added 87,800 jobs from May to June — a year’s worth of growth in pre-pandemic times — yet still ended last month with 157,300 fewer jobs than a year earlier. A year ago, the unemployment rate was 3.6%.

Last month’s numbers reflect the hopes of a rapid recovery from coronavirus-related shutdowns after the lifting of most restrictions on businesses at the end of April, followed by the tentative reopenings of many operations during May, said Mark Butler, the state’s commissioner of labor. “We saw almost all major indicators head in the right direction.”

The labor force still has 98,051 fewer people than in June of last year, Butler said, but it increased during the month by 45,618, a sign of hope. That wave represents thousands of jobless people who had been too discouraged to search for work during late spring, as well as new graduates just entering the labor market.

Other data are less encouraging. As of early July, consumer spending in metro Atlanta was down 11.5% from the start of the year, said Mike Alexander, director of the Center for Livable Communities at the Atlanta Regional Commission, during a web-based presentation.

“This will go down as the shortest recession in U.S. history, but the most severe,” Alexander said. “And the recovery is tenuous at best.”

Spending retreats mean slack demand for many thousands of workers in restaurants, stores and many businesses, he said. “Low-income workers are taking a beating. Particularly here in metro Atlanta.”

About 1.2 million metro Atlanta jobs pay $30,000 a year or less. Those jobs are heavily represented in the sectors with the most jobless claims filed: food and accommodation, healthcare and social assistance and retail.

Last week, more than 1.4 million new claims were processed nationally, according to the U.S. Department of Labor. Georgia’s Department of Labor processed 122,313 new claims, the second-highest tally among states.

Since March 21, Georgia has processed 3.2 million initial claims – more than the previous seven years combined. Of those, more than 1.1 million have been judged valid and payment has at least begun to 91% of those claims, the department said.

However, the sheer volume means that even a small percent of unpaid claims leaves thousands of Georgians waiting. And with the flood of claims continuing, the Department of Labor’s phone lines and email inboxes are still swamped with messages, many of which go unanswered.

Terri Brooks, 63, worked at a small school in Duluth, losing her job this spring because of virus-related cuts. With DOL offices closed to the public, the Canton resident filed online for unemployment benefits, but could not get through the process and was not approved. She thinks it was because something went wrong with her account on the Department of Labor site, but she hasn’t been able to reach a person at the DOL to ask for help.

Her husband is retired and collecting Social Security. “I cannot afford to continue for long with no income,” she said. “I’m at the end of my rope.”

She’s been looking for work, but has no degree. “Do you have any idea how difficult it is? There are literally 400 people applying for the same position I am.”

Some skills are in demand. Atlanta-based Envistacom is hiring engineers and other techies, as well as managers to handle the complex government contracts, said Michael Geist, senior vice president.

The company, which specializes in satellite communications, plans to more than double its 280-person staff during the next year. One reason is a shift during the pandemic in federal agency spending away from travel to research and development. “And we have been the beneficiaries of that,” Geist said.

For some workers, the job market isn’t bad at all, agreed Frank Green, president of Atlanta-based ExecuSource, a staffing company specializing in financial, tech and healthcare jobs.

“I would say that IT hasn’t slowed down at all,” he said. “And healthcare, the clinicians, you can’t find enough of them. Nurses are like gold.”

Still, because of corporate caution, the staffing business has seen a drop in placements. “There’s definitely turbulence. The idea of people saying, ‘I’m bored with my job. I think I’ll jump ship.’ We don’t hear that at all.”

Even after the very strong June, the broader numbers are sobering. The metro Atlanta economy now has 2,688,100 jobs, roughly the same as in September of 2016, said Michael Wald, former senior economist at the U.S. Department of Labor. “We have basically lost four years of economic growth.”

More painfully, the savage and unexpected economic pounding from the pandemic came just as worker confidence had reached new highs, he said. “In the first three months of this year, 349,000 people in Georgia quit their jobs. In general, people don’t voluntarily leave jobs unless they are optimistic about the future.”

Metro Atlanta monthly jobs

Largest gain, pre-pandemic: 35,300 (Feb. 2011)

Largest loss, pre-pandemic: 64,600 (Jan. 2003)

Largest gain, 2020: 87,800 (June)

Largest loss, 2020: 307,900 (April)

Sources: Georgia Department of Labor, U.S. Bureau of Labor Statistics

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Total, metro Atlanta jobs

Pre-recession peak: 2,460,100 (May 2008)

Post-recession low: 2,236,100 (Jan. 2010)

Pre-pandemic peak: 2,866,100 (February)

Most recent level: 2,688,100 (June)

Sources: Georgia Department of Labor, U.S. Bureau of Labor Statistics

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Georgia’s new jobless claims, week ending

May 2: 228,352

May 9: 242,772

May 16: 177,731

May 23: 165,499

May 30: 149,163

June 6: 135,254

June 13: 131,997

June 20: 125,725

June 27: 117,485

July 4: 105,160

July 11: 138,452

July 18: 122,313

Sources: Georgia Department of Labor, U.S. Employment and Training Administration

States with most new jobless claims last week

California: 292,673

Georgia: 120,281

Florida: 105,410

Sources: Georgia Department of Labor, U.S. Employment and Training Administration