Recession Worsens in Georgia

I read a report last week that said Atlanta is third in the nation behind Las Vegas and Detroit in vacant houses! USA Today reports that a record 1 in 9 US homes are vacant, a glut created by the housing boom and subsequent collapse.

Yesterday's AJC.com reported that there are over 6,000 unsold NEW condos in Atlanta! That doesn't count the hundreds of foreclosed and abandoned units in the metro area. There is a glut of housing in the Atlanta area, as the recession and foreclosures and unsold units push the market values south along with the rest of the economy.

On Saturday, 40 condos in plush Atlantic Station are going on the auction block. Element at Atlantic Station was said to be sold out three years ago... the place is half-empty today! Some Atlantic Station residents fear the Element auction will further depress values. Homeowners across the country are making mortgages payments higher than what their dwellings are worth today because of plummeting values. That’s led to property abandonment.

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The jobless rate in Georgia hit a record high in January, jumping to 8.6 percent, the state’s Labor Department announced Thursday. The rate the previous month was 8.1 percent, but the layoffs have continued across broad segments of the economy.

“We are officially sailing in uncharted economic waters,” said Michael Thurmond, state labor commissioner.

The jobless rate has climbed 65 percent from its level a year ago. The previous record was 8.3 percent in 1983, as the economy was emerging from what had been at the time, the longest recession since the Great Depression.

The current recession began at the end of 2007 and is widely projected to continue at least until late this year. Pessimists say it will linger into next year or even beyond. Unemployment typically crests near the end of a downturn or after the expansion has begun.

Nearly 413,000 Georgians were looking for work, an increase of 62.9 percent over the year, according to the Labor Department. Fewer than half of those people are receiving unemployment insurance benefits.

The current rate is the highest since the U.S. Labor Department standardized jobless numbers among the states in 1976.

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State coffers have confirmed what the rest of the data have said: The recession in Georgia has deepened. Revenue from tax collections in January came up $262 million short of the amount received during the same month a year earlier — a 14.3 percent decrease, the Georgia Department of Revenue announced Friday.

The shortfall provides a look in the rearview mirror, reflecting what has been a contracting economy — the cutbacks of profit-squeezed companies and debt-laden, paycheck-challenged consumers.

For tax collection, the economic currents have nearly all been head winds. On the corporate side, company spending is down, with many businesses nervous about the future and others coping now with falling sales. The result is fewer purchases, which means lower tax revenue.

But lower corporate profits also mean lower tax payments, and a series of companies in recent weeks have announced lower earnings, including metro Atlanta companies such as Rubbermaid and Equifax. Company cost cutting also translates into insecurity at best and hardship at worst for Atlanta workers. And that translates into less consumer spending on taxable items.

It has been a painful spiral: As jobs were lost, spending retreated, which meant companies cut and more jobs were lost. Unemployment in Georgia has jumped from 4.5 percent to 8.1 percent in the past year — climbing even faster than the national numbers. About 400,000 Georgians are officially jobless, according to the state Labor Department. If workers worried about layoffs tend to spend less on taxable items, those without a job are likely to be even more frugal. All of that’s bad for tax revenue.

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plez sez: the picture above shows the more than 3,000 people who were lined up for a job fair in atlanta... there were 3,000 people in line at 7:00 am waiting for the 10:00 am opening!

the economic prognosis is bleak... at best. there are no signs that the recession is letting up in georgia. we'll keep plugging away in hopes that the stimulus plan signed into law by PRESIDENT OBAMA will loosen things up just alittle. times are really tight in plezWorld... i'm ready for the recovery... NOW!

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Read the USA Today article about the record number of vacant homes in the US.

Read the AJC.com article about vacant condo auction in Atlanta.

Read the AJC.com article about record unemployment in Georgia.

Read the AJC.com article about the big drop in tax revenue in Georgia.

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