Jobless rate flat as hiring weakens in May, Labor Department reports

Consumers doubt prospect of big tax cut, forecaster says.

The metro Atlanta unemployment rate held steady in May at 4.5 percent, the same level as in April, the state Labor Department reported Thursday.

However, hiring was weaker than usual for the month, with 4,600 new positions added compared to an average of 15,000 during May over the previous five years.

The economy is not threatening recession, but it isn’t robust, said Rajeev Dhawan, director of the Economic Forecasting Center at Georgia State University.

Consumers are becoming pessimistic about getting a big tax cut soon as Trump administration proposals continue to percolate, so the appetite for risk-taking by both consumer and business has been weak, he said.

”Loan growth has been down and down,” Dhawan said.

Still, the jobless rate is down long-term. A year ago, the metro Atlanta rate was 4.7 percent. Seven years ago, it was 9.9 percent. At the worst of the post-recession period, rates were in double digits.

Since hitting bottom, the metro Atlanta economy has added about 500,000 jobs. The workforce has grown too, but by less than that – creating the ingredients of a falling unemployment rate.

Last week, the government reported that the state’s jobless rate had declined to 4.9 percent.

The jobless rates for both state and metro Atlanta remain above the national average of 4.3 percent.

The metro Atlanta economy has added 81,900 jobs in the past 12 months, slightly slower than the growth of the previous year. As in May, April job growth also was weaker than usual.

And while the number of unemployed people is dramatically lower than five or seven years ago, there were 137,000 people in metro Atlanta last month who were looking for work and couldn’t find a job. That was slightly higher than in April, the Labor Department said.

According to the Labor Department, only two sectors grew solidly. Leisure and hospitality, not usually high-paying positions, but often a bellwether of consumer spending, added 4,400 jobs. Second-best was construction, which added 1,700.

After that, things got modest in a hurry.

Information added 800 jobs. Education and health gained 700. The generally higher-paying corporate sector, known as professional and business services, was up just 100 jobs.

Service sector jobs — repair, maintenance, laundry and personal services – shed 1,200 jobs in May. Those jobs may not be high-paying but they can also be a signal of consumer spending.

Manufacturing dropped 900 jobs. The logistics and retail sector fell by 300 positions. Government shed 700 jobs. And the financial sector didn’t move the needle at all.

With schools closed, many local government workers are cut during the summer, and those cuts typically are seen in June reports. Much of the private sector is also a little slow, with the weather hot and many people on vacation. So if there is to be a re-acceleration in hiring, it may be several months before it happens.