Economists Puzzled By Rise In Georgia’s Unemployment Rate.

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.

And this:

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.

Discuss.

13 comments

  1. Ellynn says:

    Using the company I work for as an example, we hired 9 people since the first of the year, which increased the size of the company about 11%. Of the 9 people hired, only 1 was a Georgia resident when they were added to payroll. The other 8 moved here from Midatlantic or eastern Great Lakes states. 4 of them brought a spouse with them, with only one finding a job so far. There were also 4 high school aged employable children who moved with them. Two of them have part-time jobs in the service industry.

    Lets review all the job changes for these hires by the orginal nine jobs…

    1 job was filled by a Georgia residents
    11 jobs overall were filled by people who had not lived in Georgia.
    5 unemployed job seekers from out of state were added to Georgia.

    I hear this is the same for other simular companies to my employer in the state. Most are hiring from out of state. I’m not saying that this is happening to every industry or company, but when you have a “Open for Business” sign and you tell the whole country about it, don’t be shocked if other people in the country fill the jobs instead of residents of the state of Georgia.

    • benevolus says:

      Interesting. Leads to the question: Why would companies hire out-of-state people over in-state people? The obvious possibility is that they are apparently more qualified.

      So another way to look at it is that Gov. Deal is doing a great job of lowering the unemployment rate in Michigan.

    • Ellynn says:

      In our case, 4 are specialist. Due to the retirement nationwide of many baby boomers, there is a shortage of 40 to early 50 something experts in many fields. When I graduated from college the first time NO ONE was hiring. Half of my class went into differnt fields that could use their skills set. I didn’t fully enter my field until much later when the mid to late 90’s increased the need. I have road through the changes in the market. But in the last few years the baby boomers have started to leave the market to either protect state level pension changes in the public sector, or because it was a good time to sell of their stakes in the company they were a partner or principal over in the private sector.

      This is not only happening at the professional work level, but also in manufacturing and construction. I dare you to find a master mason in this state right now who is not working. You can’t teach that master level skill to a 20 year old with two year of tech school reguardless of how great the program is. What’s missing are the people between the newly trained and the upper level management and/or owners. These are the people I see being brought in from out of state.

  2. Michael Silver says:

    Gee….. I don’t suppose the Obama Administration would lie about employment statistics to aid a Democrat challenger.

  3. Mike Stucka says:

    I looked at this two weeks ago when Erick Erickson posted similar thoughts on Red State, but blamed reporters and Democrats for ignoring a growing labor force.

    Except the labor force wasn’t growing.

    https://explorer.dol.state.ga.us/gsipub/index.asp?docid=422

    Pick out 2014, state.

    Per the official state figures (look at adjusted) the actual number of employed people is the lowest it’s been all year. If we’d seen unemployment growth entirely due to the workforce, we’d see overall employment and the workforce growing. That’s simply not true.

  4. saltycracker says:

    Agreeing with Ellynn – just got off the phone with one of the largest construction companies in Atlanta: supers, foremen, experienced office staff – slim pickings on qualified ones –
    subs have been having problems getting laborers since the downturn but Hispanics that can e-verify are coming back, slowly….to save the day….

    Then we have a growing “off the radar” workforce…..

    personally – trying to get some concrete work done but good ones busy for the next few month – we’re not yet resolved to go cash…but I have been having to pay cash for small jobs…

    There are many that don’t want “work” but want “jobs”….paying well above their competency…

    • saltycracker says:

      And something I have a lot of firsthand experience in:
      People that should be unemployed (or trained):
      80%+ of the employees in the ATT company retail stores in metro Atlanta,

  5. saltycracker says:

    Buzz

    We trust you.
    Stop by the social security office and the unemployment office and gather some anecdotal info from chats with applicants and workers. Won’t solve it but might give clues.

    this is not passing the smell test.

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