The metro Atlanta economy added 10,500 jobs last month, growth that was good but fell short of the typical back-to-school burst of hiring, raising questions about whether the rising interest rates are finally starting to bite.
The region last month saw hiring across a range of sectors, especially in government, education and office support staff, according to the state Department of Labor. The area has added 150,400 jobs in the past year, with most sectors surpassing their pre-pandemic levels, officials said.
And there are still about 100,000 open positions listed on the state’s jobs site for the region, officials said.
Continuing to drive hiring are sectors where jobs have not recovered to their pre-pandemic levels. Government, for example, has 10,100 fewer employees than in March, 2020. Also, hospitals have not recovered to their previous staffing levels.
For those sectors, the drive to fill slots is likely to continue.
The Woodruff School of Nursing at Emory has 1,283 students and expects to have 1,500 within three years, more than triple its size of a decade ago, according to Tricia Benson, chief engagement officer for the school.
Instawork, an online source of jobs, continues to see need for people in leisure and hospitality. That is part of the economy’s return to pre-pandemic spending patterns as more people spend money on restaurants, hotel and other services, according to Daniel Altman, the company’s chief economist. “These are jobs that have to be done in person.”
When companies are competing for good workers, they tend to offer better benefits, more flexibility and higher pay. The tight labor market has meant workers have quit jobs far more often than pre-pandemic and when they quit, they often jump to something better paying.
The average worker in July was getting a raise at an annual rate of 5.9%, according to the Federal Reserve Bank of Atlanta, yet job switchers were getting raises at an 8.5% clip, according to the Fed.
Workers know when they are in demand. A survey by ResumeBuilder.com showed more than one of every four job switchers has changed jobs at least three times in the past year.
The Federal Reserve is worried about inflation which, even after moderating the past few months, is still near a 40-year high.
The Fed’s view is that the tight labor market means organizations have to pay higher wages to find and retain workers, then raise prices to cover higher wages, spurring workers to ask for more pay — the classic wage-price spiral. So the Fed has been aggressively raising short-term interest rates, adding .75 percentage points this week. Since late last year, that benchmark rate, which is used to set many others, has gone from zero to 3%.
Higher rates are meant to unravel that wage-price spiral by throwing a chill on demand by making it more expensive for consumers and companies alike to borrow money. So as demand ebbs, the economy and hiring will slow — which could mean job losses and a recession.
There are some signs that the economy could be losing some momentum.
Risks abound, from supply chain disruptions, China’s serial lockdowns and the war in Ukraine, as well as U.S. government policies, said economist Mikhail Melnik of Kennesaw State University. “We are bordering on recession. It is like piloting a boat in the middle of a reef. You can hit all sorts of things.”
The region’s unemployment rate ticked up last month to 3.0% from 2.8% in July. The rate would have risen even more, but the official number includes only people in the labor force and actively looking for work. And in August, the number of people in the labor force dropped by 14,859.
Moreover, there was growth in the ranks of the unemployed — that is, the number of those in the labor force who were looking for jobs. During an average, pre-pandemic August, the number of those unemployed declines, but last month it went up.
And finally, the hiring was not as strong as an average, pre-pandemic August. During an average, pre-pandemic August, metro Atlanta added 18,500.
Economists caution that one month’s data is not definitive, that the September report could dramatically reverse the narrative. But there is an old saying among investors: Don’t fight the Fed. And the Fed is determined to curb inflation.
That will eventually mean less hiring in Atlanta, said economist Aleksandar Tomic, associate dean at Boston College’s Woods College of Advancing Studies. “You have to slow down the economy, there’s no other way to fight inflation.”
Labor market, metro Atlanta
Total number of jobs: 2,990,300
Number of unemployed: 95,329
Number of people in the labor force: 3,192,404.
Labor market change in August, metro Atlanta
Change in number of jobs: up 10,500
Change in number of unemployed: up 5,609
Change in number of people in labor force: down 14,859
Average labor market change in August, metro Atlanta
Change in number of jobs: 18,500
Change in number of unemployed: down 4,081
Change in number of people in labor force: down 20,474
Sources: Georgia Department of Labor, Bureau of Labor Statistics
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