After a protracted stagnation, we’re seeing some significant improvement in the local jobs market.
Last week, the Georgia Department of Labor estimated that the Savannah metro area (Chatham, Effingham and Bryan counties) had 3,600 more nonfarm payroll jobs in September than we had a year ago. We just started seeing such annual improvements a few months ago.
But keep in mind that employment is a lagging indicator of economic conditions. As Armstrong Atlantic State University’s Nicholas Mangee explained in his column in this paper last week, employers are slow to fire and slow to hire. They generally don’t expand or shrink their payrolls until economic conditions are clear.
So the recent improvement in our jobs data had its roots back in the spring. The current increase in jobs is consistent with the surge in private investment that we’ve been chronicling at City Talk since the beginning of the year.
It’s also worth noting that the year-over-year jump in payroll employment represented an increase of 2.3 percent. That’s also encouraging news because it’s almost twice the rate of increase needed to keep up with population growth.
Public employment was virtually unchanged over the last 12 months, but we saw a 2.7 percent increase in private payrolls.
Still, we’ll need to add jobs at this rate deep into 2014 before we’ll reach the peak of metro employment in 2008.
Local job growth has certainly not been consistent across professions.
We’re finally seeing a significant increase in the number of hospitality industry workers, with a jump of 800 new jobs in the past year to reach 21,300 in the metro area last month.
Manufacturing gained 300 jobs. The broad sector that includes transportation, warehousing and utilities added 500 jobs.
Education and health services added 700 jobs, while professional and business services added 800.
In other words, we’re seeing broad-based improvement.
Government employment was virtually flat year-over-year, however, adding just 100 jobs, and so was the construction sector, which lost 100. Those stagnating numbers are worth emphasizing.
Generally when the economy is in recovery mode, public jobs increase on pace with population growth.
And new residential construction is typically a key driver out of recession.
But the overbuilding during the housing boom prevented housing from playing its usual role in the recovery. We’ve seen a significant rebound in housing starts around the country, but 2012 is still going to be one of the worst years since World War II.
If public employment and construction employment were on pace with other sectors, we’d be seeing some really robust numbers.
The local trends are slightly better than ones statewide. According to the Department of Labor estimates, Georgia added 61,800 jobs over the last year, a respectable 1.6 percent increase.
These estimates come from a survey of payroll establishments. The estimates are subject to revision, and there’s obviously a margin of error in any survey.
The estimates of the unemployment rate, the size of the labor force and the labor force participation rate come from a separate survey of households. That data is much more volatile for a variety of reasons.
We won’t get the local estimates from the household survey for a week or so, but Georgia’s seasonally adjusted unemployment rate fell from 9.2 percent in August to 9 percent in September. Some folks got in a tizzy about a slightly larger decline in the national numbers a few weeks ago, but moves of this magnitude are pretty common given the margin of error in the household survey.
Inventories too high as housing market enters slow season
A few weeks ago I noted that there are increasing signs that Savannah-area home prices have bottomed, but I have routinely cautioned that we could see continued declines in some areas and at some price points.
The relatively weak sales numbers for September certainly don’t bode well for prices in the coming months.
In September, sales of single-family homes declined significantly in some areas compared to a year ago, including West Chatham, Bryan County and Effingham County. We saw modest improvement in a number of other areas, including the southside and on the islands.
But we’re heading into the slowest sales months of the year with pretty high inventories. We have almost 10 months of inventory of single-family homes across the region.
The southside has only about seven months of inventory and West Chatham just six months. Those levels suggest relatively stable prices since the balance of supply and demand is close to its historical norm. But look for price declines in more expensive areas with significantly higher inventories.
Despite those cautions and despite the decline in sales last month, it’s definitely worth noting that we’re seeing steady improvement in housing, just as we are in employment and other key economic measures.
City Talk appears every Tuesday and Sunday. Bill Dawers can be reached via billdawers@comcast.net and http://www.billdawers.com. Send mail to 10 East 32nd St., Savannah, Ga. 31401.