Augusta area's unemployment rate drop misleading

Elections, political uncertainty a factor in hiring data

The Augusta metro area's unemployment rate in September dropped to 8.8 percent from 9.4 percent the previous month, but the drop did not occur because of a surge in hiring.


"The decline was due primarily to a shrinkage in the work force and not an increase in hiring. What we saw is that people became discouraged and dropped out of the work force, which resulted in a decrease in the unemployment rate," Michael Thurmond, the state labor commissioner, said at a job fair earlier this week in Augusta that drew about 1,750 people.

Overall, the metro area's work force declined by about 1,500 workers, according to data released Thursday by the Georgia Department of Labor. Unemployed people are only included as part of the labor force if they are actively seeking work.

The number of workers with jobs increased by about 110 people between August and September.

But the picture still is brighter than a year ago. Since September 2009, employment has risen by about 1,900 workers.

Hiring likely has dropped off recently because of uncertainty leading up to next week's national and statewide elections, said Simon Medcalfe, a professor of finance at Augusta State University.

Major reforms passed this year by Congress regarding health care and the financial services sector probably are weighing on employers the most, he said.

"There is just a little uncertainty of how those will play out," Medcalfe said. "We're waiting to see what will happen in the election and who will have control of the (U.S. House of Representatives)."

Some polls have indicated that Republicans are poised to take control of the House, with the U.S. Senate also in play, though less likely to change hands.

"I think that's mainly what businesses are waiting on -- to see what kind of political climate we will have," Medcalfe said about short-term hiring prospects.

The long-term economic outlook continues to remain more uncertain for employers and workers, he said.

In the six-county Augusta metro area, the unemployment rate ranged from 6.8 percent in Columbia County to 10.6 percent in Burke County for September, according to labor data.

Staff Writer LaTina Emerson contributed to this story.