A key burden on growth has been the Federal Reserve’s campaign to tamp down inflation by slowing the economy with hikes in interest rates. The Fed hasn’t said it wants a recession, but its effort has dramatically raised the cost of borrowing, which tends to make companies more cautious about expansion and hiring.
Inflation is still higher than the Fed’s target, but it’s been ebbing and this week the Fed’s rate-setting committee met but did not raise rates, announcing a wait-and-see approach.
Economists say the impact of rate hikes is often delayed and that a recession is still possible this year. And there have been some signs that the hiring machine might have started to slip its gears, including the failure of several huge banks and the announcement of large job reductions at high-profile tech companies like Amazon and the parent companies of Facebook and Google.
Yet for most companies, it is a time of caution, not cuts, said Katherine Saez, Georgia regional president for Truist Financial Corp. “We are not seeing layoffs. We are seeing some deferred hiring. We’ll hear that, ‘We were about to offer someone a job but we decided to hold off.’”
The national jobless rate last month rose from 3.4% to 3.7%. It has been higher than Georgia’s unemployment rate since Feb. 2020.
“We continue to see Georgia out-perform the broader economy and the nation,” said Saez. “I would say transportation, logistics, supply chain verticals are all pretty robust. And healthcare is strong and growing.”
Overall, Georgia added 14,600 jobs during the month — more than twice the usual pre-pandemic growth for May. While healthcare and social assistance added more jobs than another other sector, a range of companies were still expanding.
DS Smith, a global packaging and paper company, is hiring.
In Riceboro, where it has a mill, the company needs people with experience in engineering, industrial maintenance and various mill operations, said Monica Anderton, chief human resources officer. At its North American headquarters in Atlanta, it is hiring health and safety managers, tax and finance analysts and other white-collar jobs, she said.
Yet even with good job growth, the unemployment rate can rise if the number of people looking for work outpaces hiring. And Georgia’s labor force increased in May faster than usual.
Some of the shortfall in jobs may be among teens, out of school and looking for summer work, according to an analysis of government data by outplacement firm Challenger, Gray & Christmas. While local data is not available, the number of teens hired nationally is the fewest in 13 years, Challenger said.
Even so, the unemployment rate remains near historic lows and the number of jobless Georgians actively looking for work is about 25,000 fewer than before the pandemic. Some employers say they struggle to find the workers they need.
The state jobs board lists more than 100,000 openings.
While some sectors have recovered from the pandemic-triggered turmoil, hospitality is among those still adjusting. The sector still has many openings, even after adding 28,900 workers during the past year, according to the Department of Labor.
“We are now at 60 to 70% of where we were before the pandemic,” said Vik Zaver, Georgia region director of the Asian American Hotel Owners Association, which represents 1,458 hotels and motels in Georgia, 68% of the total. “Staffing has been an issue since 2020. It is hard to fill positions — and that is true across the country.”
That gap in frontline positions — like cleaning — has repercussions for workers, businesses, consumers and the overall economy because a shortage compels employers to raise wages, but also prices, and those changes add to inflation.
Pay for entry-level workers has climbed from $8 to $10 an hour up to $15 to $17 an hour but still there often aren’t enough workers to clean all the rooms. And dirty rooms can’t be rented out. Fewer rooms and higher costs force owners to lift rates for customers, Zaver said. “We have to jack up the rates. And still, most of our hotels are not profitable.”
Georgia jobs in May
Best, pre-pandemic: 21,300 (2015)
Worst, pre-pandemic: -13,100 (2009)
Average, pre-pandemic: 6,000
Recent: 14,600 (May 2023)
Highest, pre-pandemic: 10.9% (Oct., 2009)
Lowest, pre-pandemic: 3.4% (Dec., 2000)
Last pre-pandemic: 3.6% (Feb., 2020)
Year ago: 2.9% (May 2022)
Recent: 3.2% (May)