Georgian economy resists Fed rate hike campaign

The state lists more than 165,000 open positions on its online jobs page, with most positions in healthcare, retail and hospitality, Butler said.

But the Federal Reserve — the country’s central bank — has continued its rate-hiking campaign to tame inflation by making borrowing increasingly expensive, and the Fed is expected to eventually prevail. So far, higher interest rates have hurt the housing market and while job growth has been steady, there are signs that a broader turning point is imminent.

While monthly data can be erratic, they can often provide clues about the economy trajectory. October job growth was slightly lower than average October expansion. Meanwhile, the unemployment rate has risen to 2.9% from 2.8% in September, but it is near historic lows.

“We’re beginning to see some change in employment numbers with some isolated layoff events,” Butler said.

The increase in the unemployment rate would have been greater, but official unemployment counts only those actively looking for work; the number of employed persons in Georgia decreased during the month. That 5,573 decrease in the workforce was the fourth-largest drop on record.

The labor force typically grows in October as seasonal hiring brings more people into jobs. And the labor force has been growing since the worst of the pandemic’s shutdowns, but the pace of growth has been slower than pre-2020 for a number of reasons, including the impact of COVID-19 on workers and the need for care for many family members, and slower immigration.

That has created something of a labor shortage as employers struggle to find the workers they need, which means higher wages — one of the trends the Fed is trying to quash. But as long as spending remains high, employers need workers, and they often pay more to get them.

The median wage rose 6.4% last month — and for workers who change jobs, it rose 7.6%, according to the Federal Reserve Bank of Atlanta.

“You drive past a Wendy’s and there’s a sign that says $15 an hour and you’re just like, ‘What?'” said Padden of Georgia Furniture Mart. “We’ve had to go from $13 to $15 on some jobs and $15 to $18 on others.”

Even his better-paid sales reps got commissions, he said.

Fed officials have signaled their determination to continue raising interest rates, but meanwhile the Georgian economy has stubbornly continued to grow. Among the most recent job advertisements:

— A Hyundai Motor Group parts supplier plans to create 630 jobs near Savannah.

— Archer Aviation Inc. will create 1,000 jobs at a Newton County facility over the next ten years.

— Beretta Holding SA will create 600 jobs at a high-quality ammunition manufacturing facility in Bryan County.

— Wolf Home Products, which makes bathroom and kitchen cabinets, will create 20 jobs in Gwinnett County.

— Komar Brands, a global apparel company, plans to create 294 new jobs in Bryan County.

— Freyr Battery plans to create 723 jobs at a Coweta County factory over the next seven years.

“We’re hiring all the time,” said Jun Lee, owner of Paris Baguette near Perimeter Mall. “And we’re expanding and building two more stores in Suwanee and Buford.”

The bakery pays between $15 and $20 an hour for most jobs, [sandwich-makers, cakers and retailers] he said. “I’m definitely worried about the economy because of what you’re seeing on the news. It doesn’t look too good, but it doesn’t affect my business.”

Jobs growth in Georgia, October

New jobs: 3,700

Unemployment rate: 2.9%

Labor force: decrease by 5,573

Sectors with the most jobs: entertainment, finance, local government and healthcare

Comparison October

Average pre-pandemic job growth: 4,300

Job growth in October, 2022: 3,700

Average pre-pandemic workforce growth: 4,471

Labor force in October, 2022: decrease of 5,573

Sources: Georgia Department of Labor, Bureau of Labor Statistics