Question

Trend in Ga vs. US unemployment rate -- why the variation ?

Answer 1

Georgia’s unemployment

The country's unemployment rate for April was the highest rate the state has ever seen, the state’s top labor official said Thursday.

The unemployment rate was 11.9 percent in April, jumping 7.3 percentage points from March. The month-to-month increase also was highest one-month increase ever recorded in the state, Georgia Department of Labor Commissioner Mark Butler said.

A year ago, in April, the rate was 3.6 percent.

“This is the highest unemployment rate on record, eclipsing the previous high of 10.6 percent that occurred in December 2010,” Butler said.

Initial unemployment claims in April (1.04 million) exceeded the total number of claims for the past four years, Butler said, as unemployment applications continued to pile up as a result of the response to the COVID-19 outbreak.

Unemployment claims surged by 333 percent from March to April, bringing the overall number of claims to 1,353,921 – about 54,000 more claims than what the labor department received in 2016 through 2019.

Claims in April were 80,000 higher than in December 2010, caused by fallout from the 2007 to 2009 Great Recession.

In February, a month before the first case of COVID-19 was reported in Georgia, the state’s unemployment rate was 3.1 percent, which was an all-time low for Georgia. In February 2019, the state’s unemployment rate was 3.6 percent.

The state has seen a downward trend of unemployment claims over the past four years. Georgia saw a considerable decline in year-over-year claims between 2016 and 2017, when claims dropped by 46,500. Unemployment claims decreased by an average of 26,700 from 2016 to 2019.

During the recovery period from the Great Recession, Georgia saw an average of 3,000 jobs lost a month between June 2009 and September 2011. It was among the worst in the nation, according to a 2012 policy report by the Georgia Budget & Policy Institute.

The Great Recession was the result of a financial and housing market crash. The current economic downturn is consequential of a shorter shutdown of Georgia’s economy in an attempt to slow the spread of COVID-19.

Most businesses, schools and other organizations closed their doors as residents were ordered by Gov. Brian Kemp to stay home for 20 days, from April 2 through April 24.

US unemployment

The US unemployment rate dropped to 13.3 percent in May 2020 from 14.7% in April which was the largest in records back to 1939 and below market expectations of 19.8 percent, as the economy gradually reopened. The number of unemployed persons fell by 2.1 million to 21.0 million as those who were on temporary layoff decreased by 2.7 million to 15.3 million. Among those not on temporary layoff, the number of permanent job losers increased by 295,000 to 2.3 million. The number of employed rose by 3.8 million to 137.2 million and the labor force participation rate increased to 60.8 percent, after hitting the lowest since January 1973 the month before. Since February, the unemployment rate was up by 9.8 percentage points and the number of unemployed persons increased by 15.2 million.

Reasons

Like other economies around the world, experienced a dramatic reduction in economic activity that put millions of people out of work through early May, the time period covered by this report. The future prospects of the labor market will depend on the trajectory of the virus, the further policy response, and on how many people without jobs can quickly connect with their old jobs instead of undertaking the time consuming process of finding a new job, or even a job in a new industry.

Understanding the data can help inform projections of the trajectory of labor market recovery. This is consistent with a "partial bounce back" in the labor market, as the unemployment rate falls quickly at first, followed by a "slog" where the unemployment rate slowly falls but remains at an elevated level for a prolonged period. Of course, this is just one of many other possible future trajectories for unemployment, so a better understanding of the recent past of employment can only shed a tiny bit of light on the future of employment.

Hope you meant Georgia (GA)

Please rate my answer