Kyle Wingfield

Political commentary and opinion from The Atlanta Journal-Constitution's conservative blogger

Georgia isn't the only state with a puzzling jobless-rate increase

It seems Georgia is not alone in seeing its unemployment rate tick up over the past few months -- or for having an increase that is unsupported by other economic indicators. From the Wall Street Journal :

"Georgia's unemployment rate has soared from a postrecession low of 6.9% in April at a time when the national rate, which was 5.9% in September, has been steady or falling. Tennessee's jobless rate bottomed out at 6.3% in April but rose back up to 7.4% by August. Alabama, Louisiana and South Carolina have seen similar surges this year.

"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."

Like Georgia, these other Southern states have also seen their jobless rates rise even as employment has risen:

"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.'"

None of this means the figures have been fudged for political gain. The numbers can be off-base without being manipulated, and the WSJ piece also notes the Bureau of Labor Statistics is working on changes to its model for estimating state unemployment rates to make it more reliable. That seems like an implicit acknowledgment the current model isn't as good as it should be.

It is possible the jobless rates in these states are heralding something not being caught by other indicators -- although the jobless rate is a lagging indicator, not a leading one. But for now, besides people in certain political campaigns, it seems few people believe Georgia's economy is as bad as its unemployment rate says it is.

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About the Author

Kyle Wingfield joined the AJC in 2009. He is a native of Dalton and a graduate of the University of Georgia.