The state finished the year with a small December job loss, but recorded solid gains for the year as the unemployment rate held steady at 3.4%, the Department of Labor reported Thursday.
After a strong November, the economy shed about 1,600 jobs last month, but finished the year with a 98,100 gain.
Labor Commissioner Bruce Thompson praised “the incredible numbers in 2023,” and predicted more expansion this year “with existing companies continuing to expand and a stream of new companies calling Georgia home.”
Still, the year’s tepid end did offer evidence that the economy faces headwinds in the form of high interest rates and geopolitical uncertainties that could further slow growth.
It was a year of solid growth
Despite inflation, higher interest rates and a virtual chorus of economist predictions of recession, the Georgia economy grew.
The early in-the year pessimism was no fantasy: In its battle against inflation, the Fed had raised interest rates, meaning to chill consumer and company spending by making it more costly to borrow. Inflation did fall dramatically, but not because the economy stalled.
The expanded at a 2.02% pace, the Department of Labor said.
Not that the high rates had no impact here. The most obvious victim of the rate hikes in Georgia was housing. But unlike the housing crash that triggered the Great Recession, the industry’s problems did not drag down the economy.
Still, growth slowed
But don’t dismiss the Fed as a non-factor. Rate hikes rippled through the economy, adding to mortgage and credit card payments as well as costs of business loans. And while consumers surprised the analysts with strong seasonal spending, there are indeed signs that high interest rates have tempered hiring.
Compare last year to 2022, when the Georgia economy added 158,200 jobs, expanding at a 3.37% pace. Hiring moderated through 2023. Whether it will continue to decelerate, perhaps dragging the economy into a recession, remains a matter of debate.
State economist Robert Buschman, who teaches at Georgia State University, told legislators earlier this week that a mild downturn was in the cards. But thus far, layoffs have been muted, and the Atlanta Fed continues to see the economy growing modestly.
Georgia has been growing faster than the nation
In the past year, the U.S. added about 2.7 million jobs, a 1.75% expansion from 2022. That’s not bad, but it’s slower than Georgia’s pace.
It helps that Georgia has a diverse economy with a strong tech sector as well as the logistics and service jobs that spring from having the world’s busiest airport and two critical seaports.
Unemployment rates count only active jobseekers, so those rates can be deceptive. In good economies, rates sometimes rise because previously discouraged workers have grown hopeful enough to rush off the sidelines. Sometimes the rates fall when hiring is slow and people just stop looking.
But except for those turning points, unemployment is usually a good guide.
And in that light, Georgia looks good. Since 2018, Georgia’s jobless rate has never been higher than the national average.
Some sectors have been playing catch-up
In December, hiring was strongest in finance, construction and government, both state and local. For government, that is at least partly an attempt to make up for huge job losses in the early days of the pandemic. While most sectors are much larger than in early 2020, government has just barely surpassed its pre-COVID-19 levels.
Nearly 40% of job growth has been in sectors like government, still making up for pandemic losses, said Daniel Altman, chief economist for Instawork, an online source of short-term and temp jobs.
Some parts of government — especially teaching — continue to struggle.
While teaching has always seen a churn, hiring has historically outpaced attrition, economist Stephanie Hao of Revelio Labs, a New York-based data research firm.
At the end of 2019, teachers’ ranks were growing modestly in Georgia. But by late last year, more teachers were leaving than being hired, she said.
While there are many factors, teachers who leave for a non-teaching occupation on average get a 25% salary increase in their new job, she said.
Some sectors typically shed jobs around the holidays. Companies in manufacturing, which shed 1,900 jobs, often shut down for several weeks. Real estate lost jobs, not surprising, given the slowdown in home sales.
The labor market might favor jobseekers, but the balance is shifting
After a dizzying drop in the early weeks of the pandemic, the economy rebounded. But many people had left the workforce for health or safety reasons, or to care for children or sick relatives.
“Help Wanted” signs were everywhere, but without enough workers, many companies struggled to fill open slots. Advantage: workers.
Suddenly, employers were dangling pay hikes and sweetened benefits. It was in many ways the classic case of high demand and inadequate supply and wages — especially among blue-collar workers.
But in the past year, while the pace of hiring eased, the supply of workers surged.
Nearly 130,000 people joined the Georgia labor force last year, three-and-a-half times the growth of 2022. The result has been less-generous wage hikes, according to the Atlanta Fed’s Wage Tracker.
In December, the median wage was growing at a 5.2%-a-year pace — far above historical trends, but well below the 6.7% increases of mid-2022, the Fed said.
Georgia’s economy
December unemployment
Lowest, pre-pandemic: 3.4% (2000)
Highest, pre-pandemic: 10.8% (2009 )
Pre-pandemic: 3.5% (2019)
Average, pre-pandemic: 5.9%
Recent: 3.4%
December job changes
Lowest, pre-pandemic: -18,200 (2008)
Highest, pre-pandemic: 17,600 (1997)
Average, pre-pandemic: 4,773
Recent: -1,600 (2023)
Calendar year job changes
Lowest, pre-pandemic: -186,600 (2009)
Highest, pre-pandemic: 159,800 (1994)
Recent: 98,100 (2023)
Last five years, job changes
2023: 98,100
2022: 158,200
2021: 209,900
2020*: -178,100
2019: 88,500
Last five years, labor force
2023: 127,771
2022: 35,561
2021: 8,940
2020*: -13,864
2019: 76,108
Georgia compared to the nation
Unemployment rate:
Georgia: 3.4%
U.S. 3.7%
Pace of job growth, 2023
Georgia: 2.02%
U.S. 1.75%
Jobs added, 2023
Georgia: 98,100
U.S. 2,697,000
*Pandemic caused job loss starting in March 2020
Sources: Georgia Department of Labor, Bureau of Labor Statistics, Federal Reserve Bank of Atlanta, Federal Reserve Bank of St. Louis
__________________________________________________________
