Georgia’s unemployment rate rises, bucking seasonal trend

Year…July… August

2005… 5.3%… 5.2%

2006… 4.8%… 4.8%

2007… 4.7%… 4.7%

2008… 6.3%… 6.6%

2009… 10%… 10.2%

2010… 10%… 10.1%

2011… 10.1%… 10.1%

2012… 9.1%… 9%

2013… 8.3%… 8.2%

2014… 7.7%…8.1%

Source: Bureau of Labor Statistics

What is benchmarking?

Benchmarking is an annual calculation using more up-to-date and accurate information. Government officials use the more complete information to revise previous reports, making them more accurate. Depending on the year and the data, the revision can be either trivial or significant.

It’s become an issue because state Labor Commissioner Mark Butler said Thursday’s report of a high unemployment rate for Georgia is based on volatile monthly data that is often smoothed in the annual “benchmarking process.”

The BLS said in February that benchmarking added 158,000 jobs — an average of about 13,000 per month — to the national report from 2013.

The BLS describes these revisions as “minor.”

The next revision is scheduled for February 2015.

—- Michael E. Kanell

What is benchmarking?

Benchmarking is an annual calculation using more up-to-date and accurate information. Government officials use the more complete information to revise previous reports, making them more accurate. Depending on the year and the data, the revision can be either trivial or significant.

It’s become an issue because state Labor Commissioner Mark Butler said Thursday’s report of a high unemployment rate for Georgia is based on volatile monthly data that is often smoothed in the annual “benchmarking process.”

The BLS said in February that benchmarking added 158,000 jobs — an average of about 13,000 per month — to the national report from 2013.

The BLS describes these revisions as “minor.”

The next revision is scheduled for February 2015.

—- Michael E. Kanell

Georgia’s unemployment rate took an unexpectedly large bounce in August to 8.1 percent, reinforcing the state’s reputation as one of the worst places in the country to find a job and fueling the heated governor’s race that revolves increasingly around the economy.

The jobless rate is nearly back to the 8.2 percent it was a year ago. A steady rise began in the spring, from 6.9 percent in April to 7.7 percent in July.

Gov. Nathan Deal, Labor Commissioner Mark Butler and others profess bafflement over the wrong-direction job market. Deal and Butler even faulted the reliability of the numbers produced by the federal government, which he releases each month.

In the past, they have said said seasonal unemployment — driven largely by temporarily laid-off school bus drivers and cafeteria workers — fueled the jobless surge. Improvement, they’ve said, was just around the corner.

Indeed, the jobless rate between July and August has fallen or stayed the same over the past decade, except for the three recession-wracked years, according to the Bureau of Labor Statistics.

Not this year. More than 16,000 seasonal workers returned to their schools in August, yet the unemployment rate soared. Evidence of a struggling economy could be seen in a jam-packed parking lot Thursday at the Cobb County Convention Center. Inside, 30 employers — call centers, police departments, temp agencies and fast-food companies — were hiring.

“Jobs are hard to find, even at burger joints,” said Sam Hope III, a machine operator and warehouseman from Morrow who has looked for work since April. “I’m not picky. If I have to make $8 an hour for a minute, so be it. There’s a lot of people looking for work. Competition is very, very tough.”

Deal and Butler pointed to more encouraging news about the state’s economy. Last month, for example, 24,700 new jobs were added to Georgia payrolls. Initial claims for unemployment benefits dropped 27 percent. And the state tallied more than 4.1 million jobs — the most since June 2008.

The commissioner blamed the Bureau of Labor Statistics for the “questionable” surge in unemployment.

“Don’t pay attention to the unemployment rate,” Butler told The Atlanta Journal-Constitution.

Butler has spoken to the Bureau of Labor Statistics about the figures. “They say the ‘volatility’ in the monthly survey numbers ‘is expected’ and that it’s often ‘smoothed’ during the annual benchmarking process,” he said.

The governor blamed “historically faulty” data.

“These are surveys and estimates that the Labor Department is putting out, and every year since I was governor they’ve had to come back and adjust it downward,” Deal said at an afternoon press conference. “They’ve always been high, and I believe they are again this year.”

It’s too early to tell whether August’s unemployment rate will withstand the test of time. Each February the BLS “benchmarks” the previous year’s unemployment rate with more accurate information. The initial jobless rate in August 2013, for example, was 8.7 percent. Upon revision, and more information, the BLS revised the rate to 8.2 percent.

Rajeev Dhawan, the director of the Economic Forecasting Center at Georgia State University, doesn’t expect next year’s revisions to explain away four months of steadily rising unemployment.

“There’s no guarantee that benchmarking is going to change anything,” he said.

But Dhawan, like many economists, considers the unemployment rate an imperfect gauge of Georgia’s economy. Solid tax receipts and fewer jobless claims offer perhaps a clearer economic picture.

“I would be surprised to see that the economy has hit the skids because of this one indicator,” he said.

Employers at the Cobb County job fair concurred. Adecco, a staffing agency, sought 200 cooks, clerks, ushers and costume dressers to help Cirque du Soleil put on its upcoming extravaganza. Back office, call center and customer service workers, in general, are in high demand, said Adecco’s regional vice president, Beth Herman. And temp jobs lead to full-time employment about 40 percent of the time, she said.

John Helton, who runs Cobb County’s workforce development agency, said employers’ desire to hire is “remarkably different than previous years. … Companies are not just here for P.R. purposes. They actually have positions.”

Roughly 800 job-seekers attended the job fair. Last year, 1,400 did. A healthier economy could explain the dropoff. Or frustrated Georgians may have quit the labor force altogether, which should lower, not raise, the unemployment rate.

The so-called labor force participation rate in Georgia dropped again last month to 64.2 percent — near the record low.

Regardless, voters pay closer attention to the jobless rate than other, more accurate gauges of unemployment. And it matters little that governors, in essence, have little control over a state’s economy.

“The unemployment rate is one of the most watched economic indicators, at least by the general public,” said Kerwin Swint, a political scientist at Kennesaw State University. “So, on that score, it’s obviously not good news for the Deal campaign.”

Deal’s re-election bid against Democrat Jason Carter relies upon an optimistic message that Georgia’s economy is improving due to his pro-business leadership. The governor frequently points out that nearly 300,000 private-sector jobs have been created during his tenure.

“Good news is on the way,” Deal said earlier Thursday in Calhoun. “We are continuing to grow.”

Carter says the jobs news isn’t good and offers up the unemployment rate as Exhibit A. The state senator pivoted from an education-first message this week to attack Deal’s stewardship of the economy. A day earlier he labeled Deal’s Georgia a place “where people send their call centers.” And he often points to last month’s report that ranked Georgia’s jobless rate as the nation’s second-highest. The next state-vs.-state report comes out Friday.

“This horrible economic news is a direct result of the governor’s failed education and economic policies,” he said at a Midtown press conference Thursday.