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12/31/2013

Georgia, Tennessee Lead Regional Payroll Growth in November

In November, 45 states had unemployment rate decreases, and the other five had no change, according to the monthly regional and state employment and unemployment summary from the U.S. Bureau of Labor Statistics (BLS). All the states in the Atlanta Fed’s district were among those 45 states that saw declines in their unemployment rates, with the unemployment rates in both Georgia and Tennessee falling 0.4 percentage points (to 7.7 percent and 8.1 percent, respectively). The Sixth District aggregate unemployment rate fell 0.3 percentage points to reach 7.0 percent, mirroring the trend and level of the national unemployment rate in November.

Georgia and Tennessee saw the largest growth in payrolls in the Sixth District in November as well, according to the same report. Georgia added 14,500 payrolls in November (see the table), with roughly a third of those new payrolls being in the construction industry (up 4,400 payrolls). Roughly another third of Georgia’s job gains were in transportation and warehousing industries (up 4,100 payrolls), and the other third of Georgia’s payroll growth in November was split between leisure and hospitality (up 2,900 payrolls) and financial activities (up 1,700 payrolls). Employment growth in real estate was notable last month (up 1,200 payrolls). Tennessee added 9,400 payrolls in November, with about 2,500 of those payrolls in the leisure and hospitality sector and another 1,900 in durable goods–manufacturing industries.

Payroll Change Data

Three Sixth District states have unemployment rates higher than the national level of unemployment (Georgia, Tennessee, and Mississippi), and three sit below (Alabama, Florida, and Louisiana; see the chart).

Unemployment Rates for Sixth District States, and Sixth District Aggregate

The BLS will release metropolitan area employment and unemployment data for November, which will provide an even more granular view of regional labor markets, on Tuesday, January 7, 2014, at 10 a.m.

Photo of Mark CarterBy Mark Carter, a senior economic analyst in the Atlanta Fed’s research department


December 31, 2013 in Employment, Georgia, Labor Markets, Southeast, Tennessee, Unemployment | Permalink

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An accurate and labor perspective on the economic growth and stability of the south of the U.S. Excellent document.

Posted by: Jean Pier Dorta | 01/02/2014 at 10:37 PM

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08/05/2013

Water, Water Everywhere: An Update on the Georgia Economy

Well, it appears that Georgia now has a monsoon season. And that season is apparently now. The National Weather Service estimates that in the first seven months of the year, 45.8 inches of rain fell in Atlanta, already putting us well ahead of 2012’s total rainfall. Only seven years on record have had more rain so early in the year. And rain brings with it some friends, some more welcome than others. Mosquitoes and snakes are purportedly starting to make their way out in greater numbers. But, even if the sun isn’t literally shining much on the Peach State, things are starting to look a lot brighter on the economic front.

Georgia has seen a solid bout of employment gains so far this year, as economic headwinds diminish and hiring becomes more widespread. Growth has been led by remarkable strength in business services employment, a broad sector that includes things like administrative services, temporary help, and technical and scientific services.

The employment expansion has become increasingly broad-based, as the chart below depicts. In this chart, each bubble represents a sector—with the circumference of the bubble reflecting the relative size of that sector’s employment in the state. Each bubble’s location in the graph shows that sector’s employment momentum: the farther a sector is to the right, the stronger the 12-month performance, the closer to the top, the stronger the three-month performance. So, for example, business services—which employs more Georgians than any other single sector—is in the upper right-hand quadrant, indicating that it has been expanding on a year-over-year basis and has also been picking up speed over the three months ending in June. In fact, most sectors have been drifting toward the expanding territory recently, with the notable exception of employment in the federal government, which is still markedly contracting (though the number of federal government employees in the state actually grew in June for the first time since September 2012).



To show the state’s employment progress over time, the “snail trail” chart below tracks the movement of the state’s employment momentum since before the recession. Each point represents one month of data, with the path starting at the green dot in January 2007 and tracking to the most recent data point in blue. After spending a good deal of time contracting and expanding modestly, the state’s employment is on roughly a 2 percent path on both a 12-month and three-month basis and back near where it was in January 2007.



What’s more, manufacturing and construction—the two sectors that shrank the most (by a lot) during the recession—are both poised for progress.

Georgia, like other states in the Southeast, has proven to be well positioned to benefit from the changing landscape of global manufacturing. The state has seen several announcements of plans for new manufacturing facilities recently, drawing in manufacturers eager to seize on the Peach State’s relatively low energy costs and strong foundation of technical and logistical support. Though advanced manufacturing is very automated (read: doesn’t create as many jobs as in the past), the jobs that are created tend to pay relatively well, and the business investment and concentration of output stemming from these operations help to boost the local economy through other streams—building, transportation, maintenance, etc.

And construction isn’t just picking up on the commercial front; home building has also been on the upswing in the state. Permits for new residential construction were up more than 50 percent from the beginning of the year in May. And Atlanta Fed business contacts in the Southeast continue to report that home construction is picking up speed (see the chart).



All told, the state’s economy is still far from fully recovered, but the recent progress is certainly a welcome sign. So while the rain may be to blame for all the creepy-crawlers that are coming out, I, for one, am seeing some sun starting to peek through the clouds.

Photo of Laurel GraefeBy Laurel Graefe, Atlanta Fed REIN director


August 5, 2013 in Construction, Economic Indicators, Employment, Georgia, Housing | Permalink

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07/31/2013

'Tis the Season to Seasonally Adjust

I have a long commute. (This is Atlanta—who doesn’t?) During my trek into the office last week, I heard an alarming account on the radio about Georgia’s unemployment rate. The report noted that the state’s unemployment rate had jumped to 9.3 percent in June—its highest level in nearly a year. Thankfully, I’m kind of a data geek and I reckoned that this figure was the nonseasonally adjusted number. The radio report didn’t mention that detail, but it’s a pretty important one. Here’s why.

Economists refrain from reading too much into month-to-month fluctuations in nonseasonally adjusted data. Rather, they tend to look at data that are seasonally adjusted. It’s not a trick or a way to spin the data. It is a statistically sound method that, according to the U.S. Bureau of Labor Statistics, “eliminates the influences of weather, holidays, the opening and closing of schools, and other recurring seasonal events from economic time series. This permits easier observation and analysis of cyclical, trend, and other nonseasonal movements in the data. By eliminating seasonal fluctuations, the series becomes smoother and it is easier to compare data from month to month.”

Labor market data are particularly susceptible to the influence of seasonal factors during the summer months. Think of the school year: New graduates entering the labor force, teachers off for the summer, school administrators and maintenance workers scaling back, etc. These workers return later in the summer when school reopens (something my kids are dreading, by the way). Other seasonal factors affect the data at other points in the year, such as retailers that step up hiring over the holidays, then return to pre-holiday staffing levels in January.

The chart below compares shows Georgia’s nonseasonally adjusted and seasonally adjusted unemployment rates from January 2011 through June 2013.



The nonseasonally adjusted data show much greater volatility, most notably during the summer months and over the holidays, than do the seasonally adjusted data. The spike in June 2013 is particularly notable.

The table below shows the difference in unemployment rates among states in the Southeast. All experienced much larger jumps in the nonseasonally adjusted measure in June than they did for the seasonally adjusted gauge.



Another way to account for seasonal factors is to look at the year-over-year percent change in the nonseasonally adjusted data, which we do in the chart below. Compared with last June, Georgia has fewer total unemployed—2.3 percent fewer, to be exact.



You’ve probably noticed a couple of things in the charts above. In the first chart, even the seasonally adjusted data show an increase in Georgia’s unemployment rate. In the second chart, while the year-over-year percent change in nonseasonally adjusted level of unemployed is negative, it is decidedly less negative that it has been. The message here is that regardless of which unemployment rate measurement you look at, they continue to reflect high levels of unemployment. But it’s important to recognize that seasonally adjusted data better reflect the underlying trends in labor market data.

Photo of Mike ChrisztBy Mike Chriszt, a vice president in the Atlanta Fed’s public affairs department


July 31, 2013 in Georgia, Labor Markets, Southeast, Unemployment | Permalink

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05/10/2013

Expansion in Regional Manufacturing Continues

Manufacturing contacts in the Southeast region reported continued expansion for the fourth consecutive month, as reflected in the Southeast Purchasing Managers Index (PMI).

The Southeast PMI, produced by the Econometric Center at Kennesaw State University, provides an analysis of the most current market conditions for the manufacturing sector in Alabama, Georgia, Florida, Louisiana, Mississippi, and Tennessee. The index is based on a survey of representatives from companies in those states regarding trends and activity of new orders, production, employment, supplier delivery time, and finished goods. A reading on this index above 50 represents an expansion in the manufacturing sector, and a reading below 50 indicates a contraction.

This positive trend for manufacturing activity came as a pleasant surprise as the Institute of Supply Management (ISM) Manufacturing Index reported two consecutive drops in the national PMI, suggesting manufacturing growth to have slowed nationally. While Southeast PMI is not a subset of the national index, both measure a mix of similar components by surveying purchasing managers.

The Southeast PMI experienced less than a point increase in April compared with March. Although this increase over the prior period is minimal, the overall index reflected the highest level since May 2012 at 55.5, which is 5.5 points above the of 50-point benchmark. Increases in indices of new orders, production, and employment drove this growth, and each of these components was substantially above its respective measure in the national PMI.

Production experienced the most significant jump of the survey components, with an increase of 5.7 points from March to April, ending at 61.2. Employment jumped 4.1 points during the same period to 57.8. While new orders reflected a much smaller increase of 0.4 points, this minimal increase brings the submeasure to 57.8, well above the expansion benchmark (see the chart).

Of survey participants, 43 percent expect production to be higher in the next three to six months, versus 33 percent for the prior survey period. Although this is not the highest level of optimism reported this year by survey participants, those following the industry welcome these positive sentiments while watching to see if the region will continue to outperform national manufacturing activity.

By Amy Pitts, a senior Regional Economic Information Network analyst in the Atlanta Fed’s Nashville Branch

May 10, 2013 in Alabama, Employment, Florida, Georgia, Louisiana, Manufacturing, Mississippi, Southeast, Tennessee | Permalink

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04/23/2013

Regional Employment Grew in March, Led by Florida and Georgia

On April 19, the Bureau of Labor Statistics (BLS) released the March regional and state employment and unemployment report. Data in the report show that Sixth District states added a seasonally adjusted 45,500 payrolls in March, and the aggregated regional unemployment rate dropped 0.1 percentage point, to 7.7 percent, with results generally positive across southeastern states (see the chart). The United States as a whole added 88,000 payrolls in March 2013, which means the Sixth District states accounted for a large portion of the national gain.

Notably, February payroll gains for the region were revised down by 11,800, to a new level of 29,800. Nonetheless, the three-month average employment gain for the region remained a healthy 34,500.

Sixth District highlights

  • All states within the Sixth District with the exception of Tennessee added payrolls in March 2013 (see the table). The largest gains were in Florida (32,700, highest in the nation) and Georgia (13,600, third-highest in the nation).
    • Leisure and hospitality (12,500) added the most jobs in Florida, followed by trade, transportation, and utilities (6,600) and construction (5,500).
    • Payroll increases in Georgia came from professional and business services (6,700), trade, transportation, and utilities (4,200) and construction (3,100).
    • Most of the sectors in Tennessee cut jobs over the month, with the leaders being professional and business services (down 3,300) and trade, transportation and utilities (down 2,400).
    • Alabama, Louisiana, and Mississippi experienced only small increases in payrolls.
  • The unemployment rate decreased in Florida (down 0.3 percentage point), Georgia (down 0.2 percentage point), and Mississippi (down 0.2 percentage point). It was unchanged in Alabama and increased in Louisiana (up 0.2 percentage point) and Tennessee (up 0.1 percentage point; see the chart).

Photo of Neil DesaiBy Neil Desai, a senior economic analyst in the Atlanta Fed’s research department

April 23, 2013 in Alabama, Employment, Florida, Georgia, Louisiana, Mississippi, Southeast, Tennessee, Unemployment | Permalink

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04/03/2013

Regional Employment Increases

The U.S. Bureau of Labor Statistics (BLS) released state employment and unemployment data on March 29 for the month of February. The news was rather good.

The report showed that Sixth District states added a net 41,600 payrolls in February, which is a stronger showing that January’s upwardly revised increase of 28,200. All states in the region added payrolls in February, with Tennessee (up 11,400) and Louisiana (up 9,100) leading the way.

Contributions to Change in Net Payrolls, by Sixth District State

Meanwhile, the aggregated unemployment rate for the region remained unchanged at 7.8 percent, with individual states’ results a mixed bag (see table below). The unemployment rate decreased in Florida (down 0.2 percentage point) and Georgia (down 0.1 percentage point), the two states that together make up almost 60 percent of the Sixth District’s labor market. The unemployment rate increased in the other states in the region.

Payrolls and Unemployment in the Sixth District

Photo of Dave AltigBy Neil Desai, a senior economic analyst in the Atlanta Fed’s research department

April 3, 2013 in Employment, Florida, Georgia, Southeast, Tennessee, Unemployment | Permalink

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03/14/2013

The Sixth District’s Exports to the European Union

The European debt crisis erupted at the end of 2009, after Greece revealed that its government finances were in very bad shape. Stresses in the financial markets, brought on by investor concerns about Greece’s and other European governments’ ability to pay their debts—as well as worries about the banking system—were quickly transmitted to Europe’s economy.

Real gross domestic product in the 27-country European Union (17 countries within that political bloc use the euro as a common currency) began to fall in the fourth quarter of 2011. At the time, a SouthPoint post looked at what the European crisis might mean for the Southeast, given the region’s trade connections with Europe. The conclusion was that Sixth District’s economy was not immune to European problems. Later, in early 2012, a SouthPoint post sifted through the U.S. International Trade Administration’s (ITA) data to determine which District’s states would be more vulnerable to the contracting EU economy.

The recently released ITA state merchandise exports data for 2012 now allow us to quantify how resilient the District’s exporters were to the European crisis last year.

First, let’s put the Southeast data in the national context. In 2012, U.S. merchandise export growth decelerated substantially, to 4 percent from 16 percent in 2011. (Part of the deceleration can be attributed to changes in prices—according to the U.S. Bureau of Labor Statistics, export prices grew 8 percent in 2011 and were virtually unchanged last year.) U.S. exports to the European Union fell 1 percent last year (to $265 billion)—a marked change from the 12 percent growth in 2011. Chemicals (led by pharmaceuticals), transportation equipment (mostly aerospace-related), computer and electronic products, and industrial machinery are the top four U.S. merchandise exports to Europe. Within those categories, growth in exports of pharmaceuticals held up pretty well last year, sales of transportation equipment were mostly unchanged, while U.S. exports to Europe of basic chemicals, semiconductors, and some types of machinery saw notable declines.

As it turns out, the Sixth District did better than the United States as a whole. Exports to the European Union increased 4 percent last year. All the Sixth District states except Mississippi are among the top 20 states that export to the European Union, and only Florida saw its exports to Europe shrink last year. Louisiana’s exports increased 15 percent and Alabama’s rose 8 percent, while sales to Europe were essentially unchanged last year for Georgia, Tennessee and Mississippi.

Looking into the industry mix—which products Europe imports from each state—can help explain the varying export performance across the District. (Another big factor, of course, is the countries within the EU to which states sell their products.)

Let’s start by looking at Louisiana—not only the state where exports to Europe grew at the fastest rate in the District last year, but also the nation’s fifth-largest exporter to the European Union. Louisiana’s biggest export to Europe, as to the rest of the world, is petroleum and coal products. These products accounted for about two-thirds of last year’s growth in the state’s exports to Europe. Most of the rest of that growth came from a 47 percent jump in exports of agricultural products, largely grains and oilseeds.

The industry mix is very different for Alabama, where exports to Europe also grew in 2012. Most of the growth was driven by a 43 percent increase in sales of transportation equipment. For most other industries in Alabama, sales also changed at double-digit rates—both up and down. There was little inching up or edging down; it was more like soaring or plummeting. Chemicals and paper—the state’s two other big exports to Europe—fell by about 25 percent, exports of fabricated metal products rose nearly 60 percent, and Alabama’s sales of wood products to Europe increased more than 80 percent.

Exports of wood products to Europe did even better in Georgia, growing by nearly 500 percent last year to $81 million. As Tom Cunningham—the Atlanta Fed’s regional executive for Georgia—explains, the European Union (and in particular, Germany) is increasingly relying on renewable energy, and there’s been a huge surge in taking Georgia’s readily available pine, pelletizing it, and shipping it off to be burned in Europe. This appears to be a common theme in the South Georgia pine regions. But pellets are still a niche export. Georgia’s total exports to Europe did not grow last year, mostly because the state’s sales of transportation equipment—Georgia’s largest export to the European Union—fell 10 percent.

Growth in exports to Europe also stalled in Tennessee last year. While many of the state’s industries faced a decline in demand from across the Atlantic, total exports to Europe held up because of 15 percent growth in sales of computer and electronic products. Tennessee’s second-largest export to Europe—medical supplies and equipment—also grew, albeit at a much more modest 2 percent.

Similar to Tennessee, but on a much smaller scale, Mississippi’s exports to Europe were boosted by sales of computer equipment and medical supplies and equipment. The aerospace industry also did very well in terms of sales to Europe. However, because of big declines in exports of chemicals and paper, Mississippi’s exports to Europe were essentially the same as in 2011.

While computer and electronics industry fared well in Tennessee and Mississippi, Florida was one of the worst hit in terms of exports to Europe. That industry is the state’s second-largest exporter to Europe, so a 23 percent decline in those exports accounted for a big part of the 7 percent drop in Florida’s total exports to the European Union.

Overall, the Sixth District’s exporters to Europe showed resilience last year, benefiting from the continent’s demand for our energy and agricultural products, certain types of electronic products and medical supplies, as well as a notable increase in prices for some of those products. Still, as European economy stabilizes in 2013, let’s hope for a better year for our exporters.

Photo of Galina AlexeenkoBy Galina Alexeenko, director of the Regional Economic Information Network for the Atlanta Fed’s Nashville Branch

March 14, 2013 in Alabama, Europe, Exports, Georgia, Louisiana, Mississippi, Tennessee | Permalink

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05/22/2012

Georgia employment on my mind

On a seasonally adjusted basis, Georgia had the third-largest job gain in the country last month, adding 7,800 payrolls to the state's economy. This growth accounted for over half of the Sixth District's job gain (14,400) in April. What sectors are hiring, and where are losses still occurring? Let's take a look into the details of the U.S. Bureau of Labor Statistics' (BLS) Regional and State Unemployment Summary for April for a deeper look into last month's numbers for Georgia.

Many of the jobs added in Georgia last month were in sectors especially hard hit by the recession. For example, Georgia saw 1,300 new payrolls in construction in April. The largest sectoral gain for the month was in trade, transportation, and utilities, where 3,400 net new jobs were added. Of those, 2,100 were in retail; 1,100 were in transportation, warehousing, and utilities; and 200 were in wholesale trade.


Continuing its broader trend so far in 2012, Georgia's government sector continued to shed jobs in April, losing 1,200 payrolls. The only gain posted for the state's sector so far this year was a meager addition of 600 jobs in March, which followed losses of 2,200 and 3,300 in January and February, respectively.

MSA-level employment
Here's a look at how Georgia's metropolitan statistical areas (MSAs) fared last month in terms of employment:


As you can see above, Atlanta had the greatest level of job creation in the state in April. Athens and Columbus tied for second place, each adding 900 jobs. Among Georgia MSAs, Dalton shed the greatest number of payrolls in April, losing 1,000. Nonseasonally adjusted data for Dalton suggest the majority of the MSA's job loss came from mostly from services and government, not from goods-producing industries.

Of course, this snapshot is just a glance at one month's data. Putting the gains above into perspective would require looking at how far employment levels had fallen in each of the sectors or MSAs. For example, Atlanta's 5,100 job gain for April may make the greater metro area appear to be growing by leaps and bounds, but the Atlanta area had the largest decline in number of payrolls as well. From peak (February 2008) to trough (December 2009), the Atlanta-Sandy Springs-Marietta MSA shed 205,100 jobs, or 8 percent of its employed workforce.

Photo of Mark Carter By Mark Carter, a senior economic research analyst in the Atlanta Fed's Research Department

 

May 22, 2012 in Employment, Georgia | Permalink

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02/28/2012

Georgia outlook update

On February 22, the Economic Forecasting Center at Georgia State University's J. Mack Robinson College of Business held its first quarterly conference focusing on the outlook for the local, state, and national economies.

According to GSU's forecast, the ongoing fiscal and financial challenges in Europe, rising energy prices, cautious U.S. consumers, and weak corporate confidence are the headwinds that Georgia's economy will face in 2012 and 2013. Rajeev Dhawan, director of GSU's Economic Forecasting Center in the Robinson College, reported that gains in growing sectors—such as professional and business services, manufacturing, and healthcare services—have not been great enough to offset losses in lagging sectors such as construction, local government, and banking.

Here are some highlights from the GSU Economic Forecasting Center's report for Georgia and Atlanta:

  • Georgia will add 14,300 jobs, including 2,500 premium jobs, in calendar year 2012. Employment levels will improve in 2013, when the state will add 40,600 jobs, of which 7,200 are premium jobs (resulting in a 0.8 percent annual growth rate). In 2014, the recovery will be better but still moderate, with the economy adding 66,700 jobs, 14,100 of which will be premium jobs (a 1.5 percent annual growth rate).

  • Georgia's unemployment rate will be 9.7 percent in 2012, only 0.3 basis points lower than 2011 levels. In 2013, unemployment will decline to 9.3 percent. In 2014, it will decline again significantly, to 8.5 percent.

  • Atlanta employment will mirror statewide conditions for calendar year 2012, with 10,300 job gains (2,900 premium jobs). Employment will grow in 2013, with the Atlanta economy adding 28,700 jobs (5,200 premium jobs). Atlanta employment will increase again in 2014 by 44,800 jobs (9,600 premium jobs).

  • Atlanta housing permits will increase by 12.6 percent in 2012 to 9,594 units as a result of a boost in multifamily housing permits (28.9 percent). Single-family permits will post a mild increase of 5.9 percent this year. Permit activity will increase by 17.1 percent in 2013, with single-family and multifamily housing activity posting increases of 11.7 percent and 27.8 percent, respectively. Permit activity will grow again in 2014, posting an overall increase of 22.4 percent, with multifamily permits growing at 31.6 percent.

In a recent speech, Atlanta Fed President Dennis Lockhart noted that he anticipates steady, moderate growth in the absence of potential shocks, a view similar to Dr. Dhawan's outlook for the state.

Photo of Michael Chriszt By Mike Chriszt, an assistant vice president in the Atlanta Fed's research department

February 28, 2012 in Georgia, Outlook | Permalink

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01/19/2012

Georgia on my mind (again)

You wouldn't think a breakfast talk about economics would be all that interesting. Not true. Yesterday morning, I participated in a monthly breakfast seminar hosted by a local group aptly called "Eggo-nomics." The discussion was about the current state of Georgia's economy.

I'm not saying that my presentation was all that enthralling, but the questions and comments from the participants certainly were interesting. Of the several questions I received, the most common centered on the theme of why Georgia's economy continues to lag other parts of the country.

As it so happens, these questions mirrored one that was posed to Atlanta Fed President Dennis Lockhart in a recent interview with the Atlanta Journal-Constitution. He was asked, "Certain areas of the country, like the Northeast, are recovering faster than the Southeast. Why?" Here is President Lockhart's response:

"I get the question frequently: 'How is the Southeast doing relative to the rest of the country?' And my answer is, broad generalization, a little worse than the national averages. Not dramatically worse, just a little worse. And I use unemployment as an example. The unemployment rates for the six states we follow here, with the exception of Louisiana, are above the national average.

"Those rates have been coming down, just as the rate nationally has been coming down. But there is a lagging picture for Georgia and for most of the Southeast. You can explain some of the cause by looking at the exposures in the bust which were real estate-oriented, the dramatic slowdown in construction and the number of people put out of work who were in the construction trades.

"And to some extent in banking [many of the problems stemmed from] the dependence on real estate lending in many banks.

"If you want to step back even further, you had a couple of decades of in-migration, particularly Atlanta. You have to build houses to hold the people who migrate here, so real estate construction was a big thing. They come and get jobs; they need office buildings in which to work. So commercial real estate is a big thing and when that turns negative, it creates a problem that is more difficult than in the Northeast service-industry contraction."

SouthPoint has reported on this topic and will continue to dig into reasons behind Georgia's lagging recovery.

Photo of Michael Chriszt Mike Chriszt, an assistant vice president in the Atlanta Fed's research department

January 19, 2012 in Georgia, Outlook | Permalink

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