Unemployment rose in Georgia and was unchanged in Tennessee last month despite a decline in the U.S. jobless rate during July.
Government job cuts in both states more than offset gains in private-sector jobs, keeping Tennessee's jobless rate at 8.5 percent in July and boosting Georgia's unemployment rate last month to 8.8 percent. Unemployment nationally averaged only 7.4 percent in July.
"The rate increased primarily because there was a significant number of new layoffs, and non-contract school employees remained unemployed because of the summer break," Georgia Labor Commissioner Mark Butler said. "However, the vast majority of the layoffs were temporary and the school employees are beginning to return to work."
Private sector jobs in both Tennessee and Georgia have risen steadily so far this year. But those gains have been offset by cuts in both state and federal government employment.
"The private sector is having to make up for the shrinkage in public sector jobs," said Dr. William Fox, director of the Center for Business and Economic Research at the University of Tennessee. "That explains part of the slow employment growth that we've seen in recent years."
Fox said he expects the economy to continue to grow through the balance of the year, although government employment may continue to be a drag on the pace of employment growth.
Over the past year, employment in the private sector has added 45,700 jobs in Tennessee, but government jobs have declined by 13,400.
Last month in Georgia, private-sector employment grew by 15,800 jobs, but government employment losses more than offset those gains with job cuts of 17 300 jobs by local, state and federal government.
Construction and manufacturing both showed growth across both states last month, adding 5,100 jobs in Tennessee and 8,200 jobs in Georgia.
"This is one of the largest over-the-month gains in construction we've seen in a very long time," Butler said. "Most of the construction growth is in the specialty trades, such as electricians and carpenters, which are in-demand occupations."
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