Metro jobless rate falls, but slower hiring forecast

2015 — 69,700

2016* — 68,500

2017* — 54,500

2018* — 54,400

*Forecast

Source: Georgia State Economic Forecasting Center, Bureau Labor Statistics

The jobless rate for metro Atlanta fell to 4.8 percent last month, from 5.2 percent in March, as the region added a solid 21,500 jobs, the state Labor Department reported Thursday.

Layoffs were down and employers across a range of sectors hired, though the biggest chunk of new jobs came in the relatively low-paying leisure and hospitality sector.

While the statewide unemployment rate remains higher, the metro rate is now back below the U.S. rate of 5.0 percent. Atlanta’s economy has been growing faster than the nation’s, adding 83,300 jobs since April of last year, when the unemployment rate was 5.4 percent.

The latest jobless rate news came with a couple dashes of cold water, however.

For one, labor commissioner Mark Butler linked the April decline to a monthly dip in the labor force, which includes both employed workers and those seeking work. A smaller labor force can reduce the rate but also reflect a perception that jobs are not plentiful, sending some seekers to the sidelines. Still, metro Atlanta’s labor force is up by 51,000 over the past year.

Also Thursday, Georgia State’s Economic Forecasting Center predicted weaker job growth for the next several years compared to last year.

Statewide, payrolls will add about 95,200 jobs during 2016, down from 140,000 last year. A little more than one-fifth of them “premium” positions that pay well, Rajeev Dhawan, director of the center, said at the center’s quarterly conference.

“And for me, that is super-optimistic, given the kinds of things that we are dealing with in the world economy,” he said. He said business investment has been “miserable,” adding “If business is not spending, where is the hiring going to come from?”

Many businesses are sitting on cash because they just don’t see good options, he said. “They say, ‘I don’t care about the return on capital. I care about the preservation of capital.’”

The result is an erratic expansion, Dhawan said.

A lengthy and combative presidential campaign isn’t helping, Dhawan added. He noted that presumptive Republican nominee Donald Trump has suggested renegotiating government debt, something that has never been done.

“Once the lenders hear that, what do you think will be the reaction?” he said. “And things are going to get a lot more volatile as we get toward November.”

Georgia’s economy has out-performed the national economy, but it has been tugged in opposite directions, Dhawan said: Companies that rely on global business have hit choppy air, while those that rely on demand closer to home have done better.

One concern: many new jobs are in lower-paying sectors – a conclusion buttressed by state tax collections, Dhawan said. That limits the buying power of Atlanta households, which in turn crimps growth.

The center’s forecast shows metro Atlanta’s housing market continuing a steady if uneven rebound, spurring construction and construction jobs, he said. Permits for new homes will rise 10.3 percent, while home prices will climb about 5.5 percent, Dhawan predicted.

Dhawan also said he expects the Federal Reserve will pull back from another hike in short-term interest rates until next year.