Georgia economy ends year with growth but shows some signs of fatigue

The state’s economy in December finished the year with strong job growth, but also showed some signs of fatigue as cuts mounted among tech companies and workers left the labor force.

The Georgia unemployment rate held steady at a historically low 3% in December as the state added 5,900 jobs during the month, including healthy hiring in manufacturing, hospitality, white-collar office positions and health care, the Department of Labor reported Thursday.

Despite spikes of inflation through the year and attempts of the Federal Reserve to slow the economy with higher interest rates, Georgia’s payrolls grew by 165,300 jobs during 2022, with strong hiring in manufacturing, hospitality, professional services and healthcare.

“As we begin our new administration, I am excited to see growth in nearly all sectors,” said Bruce Thompson, who recently took office after being elected Labor Commissioner in November.

Nearly, but not all: Tech companies have been cutting jobs.

In metro Atlanta, companies slashing positions include Greenlight Financial, Amazon and Salesforce. Microsoft this week announced it will lay off about 5% of its employees, but did not say where the cuts would be.

The number of officially unemployed Georgians barely ticked up in December, but tech workers often have severance packages and do not count as unemployed until that money runs out.

Many economists are convinced that the Fed’s determination to slow the economy will provoke a recession this year. And despite Georgia’s strong growth, there are hints that the robust post-pandemic recovery could be losing momentum.

The number of people in the Georgia labor force — that is, either working or looking for work — has fallen, dropping by about 32,000 during the past six months, including a 5,000 dip in December, according to the Department of Labor.

That leaves the share of working-age Georgians who are in the labor force lower than its pre-pandemic level, a decline that could have a variety of causes.

Many economists recently have said the biggest single reason for a shrinking labor force is the wave of retirements by boomers. But there are other reasons: People drop out of the workforce to take care of children or sick family members or to return to school. And they drop out because of illness — like COVID, or its lingering effects.

And when hiring is anemic, many people stop looking for work.

That doesn’t seem to be the problem yet, since employer demand seems to be solid: More than 100,000 positions are listed on the state’s job site, according to the Department of Labor.

Yet that demand is not spread evenly.

Companies like Wellstar Health System, Home Depot, Piedmont Healthcare, Walmart and Pizza Hut have hundreds of openings, the department said. In recent weeks, Qcells announced plans to expand its solar module-making operations, adding 2,500 jobs in northwest Georgia. Renewal by Andersen said it will create 900 new jobs in Henry County.

Meanwhile, the big tech companies cut.

Yet small companies historically account for much of job growth, and a record number of new businesses have been started in the past two years, according to a report this week from the Census Bureau.

“Every business application is really a vote of confidence in the economy,” said Bharat Ramamurti, deputy director of the White House National Economic Council, in an online briefing this week. “Regardless of what the forecasters may say, the people out there who decided to put their own money at risk are feeling good about the direction of the economy.”

Walker Architects is not a start-up, but it has just opened a new office in Atlanta, which is a new market for the Florida-based firm. The Atlanta venture is a bet against the pessimists and a bet on continued growth, said Joe Walker, president.

Regardless of the nay-sayers, the company believes new offices and research facilities will be needed, he said. “The pandemic maybe scared some folks — you know, ‘Maybe I don’t want to be there so often’ — but the work still has to happen. What’s the new tomorrow? We can’t predict that, but it’s not going to be zero space.”

Georgia job growth, December

Average, 25 years pre-pandemic: 4,200

Average, 5 years pre-pandemic: 7,900

Recent: 5,900

Georgia job growth, by year

2012: 70,600

2013: 88,700

2014: 137,800

2015: 112,600

2016: 96,700

2017: 69,700

2018: 79,300

2019: 85,300

2020*: -183,200

2021: 204,400

2022: 165,300

*Pandemic began in March

Percentage growth in jobs

Best year, pre-pandemic: 3.4% (2014)

Worst year, pre-pandemic: -4.6% (2009)

Recent: 3.5% (2022)

Georgia job growth, December

2012: 1,700

2013: 8,200

2014: 16,300

2015: 16,800

2016: 5,700

2017: 4,300

2018: 2,100

2019: 10.600

2020: 24,100

2021: 23,300

2022: 5,900

Georgia jobs

Pre-pandemic: 4,666,400

Pandemic bottom: 4,053,000

Current: 4,840,000

Georgia unemployment rate

Pre-pandemic high: 10.9% (Nov., Dec. 2009)

Pre-pandemic low: 3.4% (Oct.-Dec., 2000)

High, pandemic: 12.3% (April 2020)

Current: 3.4% (Dec. 2022)

Sources: Georgia Department of Labor, Bureau of Labor Statistics