Unemployment Rate Up, But Why?

The news came out this morning that Georgia’s unemployment rate rose from an adjusted 7.7% in July to a preliminary rate of 8.1% in August. Democrats, as you might expect, pounced on this as further proof that the GOP has failed and Jason Carter must replace Nathan Deal (received via press release from the Carter campaign):

“This is disastrous news for families all across Georgia who are suffering the consequences of Gov. Deal’s failed policies,” Carter said. “On Gov. Deal’s watch, not only has Georgia gone through the slowest jobs recovery in the nation, we appear to be reversing course.

But are we really “reversing course” and have Governor Deal’s policies failed?

Looking at Department of Labor numbers (see link above), Georgia added 24,700 jobs in August and total employment now sits at 4,132,900, the most since June of 2008. Furthermore, initial unemployment claims for August were 31,122, down by 11,536 from July and down 4,381 from August 2013. Georgia’s total employment is up by 79,300 over last August(pdf).

Looking at data from the Bureau of Labor Statistics, the number of unemployed in July of 2013 was 396,238 and their preliminary data from July 2014 (the latest available) shows 370,391, a decrease of 6.5%.

If the number of people employed is going up and the number of unemployed is going down why is the unemployment rate increasing? I think one reason is people returning to the workforce. That has been an accepted explanation for slight increases in the national unemployment rate which have occurred from time to time, surely it is happening in Georgia as well.

Additionally, people continue to move to Georgia. The population of Georgia, according to the Census Bureau was 9,992,167 in 2013, up from 9,687,663 in April of 2010. That’s a 3.1% increase since the last census. Assuming a steady growth, we’ve been adding a little more that 1% to our state’s population each year. The 2014 census estimate will be released in December but it’s reasonable to expect it to show continued population growth – some of it at least from people moving here. People don’t move to a state where their life will be worse, they move for personal reasons, but also because they think opportunity awaits.

Would I love to see Georgia’s unemployment rate lower than the national average? Of course, but we are adding jobs, the number of unemployed is shrinking, people are rejoining the workforce, and new people are moving to our state. We’re not reversing course because of failed policies, things are headed in the right directing and we should roll up our sleeves, work hard and stay the course.

17 comments

  1. Ralph says:

    Governor Deal better put up a TV ad about the increase in jobs, decrease in unemployed; statistically being overwhelmed by bigger increase in job seekers returning to the market and increased population. The liberal media backing Carter is NOT going to report it before the election.

  2. griftdrift says:

    Ahhh the liberal media. If it wasn’t for those rascals, Republicans would have 100% of the elected offices instead of just super majorities. It is quiet sad.

  3. griftdrift says:

    Gosh Buzz. This makes me absolutely nostalgic for the days when some folks, won’t name names or call out political persuasions, were pummeling on the national rate, obsessing about participation rates and how all these things – that most people don’t understand – meant the country “was headed in the wrong direction”. Good times. Good times.

    • There’s no doubt the country is headed in the wrong direction, but Georgia is headed in the right direction. Provided of course the people vote the way I tell them to. 🙂

      • Ed says:

        ” Provided of course the people vote the way I tell them to. ”

        The negative campaign ads from this comment will write themselves….

        • Will Durant says:

          Has Buzz ever written the words “I support the President…” in any context? As we have seen, these heinous words can be used for months in attack ads.

  4. View from Brookhaven says:

    People are moving in, but jobs aren’t.

    Site Selection Magazine must be missing its target audience.

  5. Lea Thrace says:

    How come this argument was never really taken seriously (in certain circles) when applied to fluctuations in the national rate?

    Things that make you go hmm…

  6. objective says:

    i don’t see any noteworthy difference between the above argument and the one obama admin has used re: national unemployment. one can only dream that logic and reason will be fairly applied to public policy debates or discussions.

    • Baker says:

      “i don’t see any noteworthy difference between the above argument and the one obama admin has used re: national unemployment”

      Yes. As griftdrift also mentioned, Republicans can have it one or the other but not both. They’re definitely trying to have both. I personally think the economy stinks everywhere (except apparently North Dakota) and that some part of the current growth (both nationally and here in our fair state) is a new bubble propped up by unsustainable interest rates, handouts to corporations and fuzzy accounting.

      • David C says:

        What’s undeniable is that the last 15 or so years have seen a sea change in how Georgia performs relative to the rest of the country. Remember last election cycle, when Deal had ad after ad saying that Georgia had its worst job loss in history under Barnes? It was technically true (although there wasn’t state data from the Great Depression Era), because in the ’01 Recession Georgia actually had a period where they lost jobs for the first time since state level data starting being tabulated around the early 1970s. It wasn’t a huge loss, certainly compared to what happened to the state in 2008-09, but it was a canary in the coal mine.

        Prior to that, Georgia weathered recessions, even really bad ones like 1981-82 that saw national double digit unemployment, never saw Georgia lose jobs. Hiring slowed, and the unemployment rate went up (albeit generally below the national average), but Georgia’s economy kept growing. In 2001-02, it didn’t. In 2008-09, it hemorrhaged. In 2014, it piddles along behind the rest of the country.

        Republicans have been in power in the state for 12 years now. What have they accomplished to try and counteract this trend? Do they have a comprehensive plan to grow the state’s economy to better position it in the 21st century? What will they do help metropolitan Atlanta work better as the economic engine of the state that it is? What are they doing beyond running around trying to spin numbers, blame others, and suck up to business magazines?

      • Dave Bearse says:

        Speaking of both ways, there’s was the lament a couple of years ago that moochers were the reason the fraction of working people was so low. Now people looking for work is the excuse the unemployment rate is up.

        For context, the US population increased 2.4% 2010 to 2013, so 3.1% isn’t very extraordinary.

  7. Alex Rowell says:

    Problem with this argument is that Georgia’s labor force growth hasn’t been particularly exceptional – it’s right around the national median, but we’re still falling way behind in unemployment rate.

    In fact, states with greater labor force participation rates actually tend to have lower unemployment rates. We’re a stubborn outlier state, so this poor performance can’t be blamed on a rapidly growing labor force.

    At the risk of getting caught in the spam filter, check this graph here. I’ve used labor force participation since Jan 2011, and July unemployment numbers, since that’s all BLS has at the moment. We’re the red dot 2nd from the top.
    http://i.imgur.com/myzQt1D.png

  8. Harry says:

    Deal has little influence over the unemployment rate in Georgia. The issue is the low-quality workforce average skillset. “You can’t make a silk purse out of a sow’s ear.” It’s getting worse not better, due to low quality in-migration demographic.

  9. saltycracker says:

    It is harder to find competent tech or service, and when you do more want cash or prefer alternate income streams, the roads are crowded, the schools are crowded, the restaurants are busy, bullldozers are everywhere, people are fatter and state tax revenues are up. Unemployment must pay enough.

  10. Dave Bearse says:

    No less an authority than former GE Chairman Jack Welch said the BLS manipulated unemployment statistics for political gain, so that’s got to be true.

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