A couple of weeks ago the news came out that Georgia’s unemployment rate had risen to 8.1%. I gave you my thoughts on what caused the rise here, and I’m sure you all remember the political reaction.
The Wall Street Journal spoke to some folks and looked at some data:
The recent numbers have left many economists scratching their heads, unable to explain why unemployment appears on the rise across the South while few other data—unemployment filings, home purchases, corporate hiring—suggest a sudden souring of the region’s economy.
“I’m not getting any feedback,and we talk to people every day,that’s saying the wheels are falling off Georgia’s economy,” said John Robertson, senior economist at the Federal Reserve Bank of Atlanta.
Louisiana, for example, saw seasonally adjusted payrolls rise 1.2% from April to August, while the unemployment rate jumped 1.3 percentage points. Georgia’s nonfarm payrolls rose 1% even as the state’s jobless rate climbed 1.2 percentage points in four months. In Tennessee, payrolls have grown 0.6% since April, even as its unemployment rate has climbed to 7.4% from 6.3%.
A September report from Wells Fargo economists described Georgia’s economy as gaining momentum, with the high unemployment rate as a “lone warning sign” that “seemingly flies in the face of common sense.” The rising rate, they said, may reflect people re-entering the workforce “in anticipation of better employment opportunities.”
Wells Fargo essentially agrees with me:
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.
There’s no doubt the debate over Georgia’s unemployment rate will continue and will be infused with political ambitions of those in heated races. I’m more convinced than I was a few weeks ago that the rise is caused by people reentering the workforce and moving to our state.