Georgia job market mixed; Kemp spends cash to stop tax hike

ATLANTA (AP) — Georgia's job market flashed mixed signals in December, with employers adding more people to payrolls and the unemployment rate ticking down even as the labor force shrank.

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The new figures were released Thursday as Budget Director Kelly Farr told lawmakers that Gov. Brian Kemp's administration will keep using federal coronavirus aid to cover the cost of state unemployment benefits, aiming to avoid an unemployment tax increase on employers.

Georgia's unemployment rate fell to 5.6% in December from 5.7% in November, ending a volatile year when jobless rates soared from 3.1% in December 2019 to 12.6% in April because of the coronavirus pandemic, and then bounced downward erratically.

The number of people seeking jobs fell by about 30,000, driving the decline in the unemployment rate. The number of unemployed Georgians ticked down by about 7,000 to 286,000.

The nationwide unemployment rate in December was 6.7%, the same as in November.

A separate survey of employer payrolls — the top indicator for economists — showed that the employment rebound from the spring continued at a slightly higher pace. Georgia businesses hired an additional 45,000 people in December, boosting business employment to about 4.56 million people. That was the best increase since June. Employer payrolls have recovered much of what they lost earlier this year, but remain about 137,000 jobs below the all-time record high in February.

New jobless filings in Georgia remain elevated, with more than 32,000 workers seeking benefits in the week that ended Jan. 16. A total of 167,000 workers are getting regular state jobless benefits, while another 82,000 are getting special federal assistance.

Labor Commissioner Mark Butler said the state is making payments to some workers eligible under the new relief bill Congress passed at the end of the year, but is still programming its computers to be able to pay other workers, with more people expected to get new payments in the next two weeks.

The huge tide of unemployed this year sucked dry the $2.5 billion Georgia had built up to pay claims. Typically, when that happens, states borrow money from the federal government and then repay it using taxes collected from employers. But the federal government is allowing states to use federal aid to pay back borrowing, and Kemp in October said he would use up to $1.5 billion in federal money to do so. That choice precludes more aid to local governments, as some had hoped for, or more targeted relief programs for businesses and individuals.

Farr said Thursday that Georgia has already spent $994 million covering the cost of jobless benefits, and that the administration wants to reserve as much as possible of the remaining $440 million to do the same thing.

“The state will otherwise be forced to rely on increased (unemployment insurance) taxes on Georgia employers to repay these federal loans while covering any interest on those loans,” Farr told lawmakers during budget hearings.

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