Georgia runoffs throw highlight on state’s financial restoration | Enterprise and Economic system Information
The future of economic recovery in Georgia and the United States could be balanced by Tuesday’s runoff elections, which will determine whether Republicans or Democrats will control the US Senate.
While Republicans and Democrats argue about who will best run the Georgian economy, the state itself is an example of how government intervention after the Covid-19 crisis helped its recovery.
The Georgian economy has recovered and unemployment has fallen to near zero below the national average after more than $ 3 trillion in fiscal stimulus and the Federal Reserve cut interest rates. This has boosted the housing industry and spurred development in Metro Atlanta and the US carpet capital Dalton, as well as car manufacturing in the state. One weak point that no country could escape was tourism.
Further incentives could be on the way with $ 2,000 checks for Americans if Democratic candidates Raphael Warnock and Jon Ossoff win, President-elect Joe Biden promised an election freeze on Monday. Meanwhile, Republicans David Perdue and Kelly Loeffler received support from President Donald Trump at a rally in Dalton that saw unemployment fall from 20% in April to 5.2%.
“Georgia has more clout than most states because of the real estate boom,” said Jeffrey Humphreys, director of economic forecasting at the University of Georgia Terry College of Business. “We’re seeing a V-shaped recovery in housing and vehicles. Georgia benefits from that. “
In the meantime, Tuesday’s Senate race results could also determine the near-term direction of the U.S. economy. If the Democrats take control of the upper chamber and Congress quickly passes $ 2,000 in economic tests, that would add 1.1 percentage points per quarter to annualized growth in 2021, according to Bloomberg economists.
Here are a few examples economists cite that Georgia’s economy is doing well compared to much of the US
“The Georgian economy is weathering the pandemic better than most other countries,” said Mark Zandi, chief economist at Moody’s Analytics. “Employment was down 3% through November from its pre-pandemic peak, less than half of the nationwide employment decline of over 6%. The unemployment rate in Georgia is 5.7%, a full percentage point below that of the country. “
“The Georgian economy is doing reasonably well, especially Northern Georgia,” said Mark Vitner, senior economist at Wells Fargo & Co. “The flooring business, which used to be carpets but now includes hardwoods and laminates, is doing very well. The poultry industry is doing well and the state continues to attract new industries. Economic development was pretty strong last year. “
“The state is less urban than the rest of the country, despite Atlanta, which has mitigated the economic impact of the virus,” Zandi said. “The state is also likely to benefit from the phenomenon of labor everywhere as it attracts migrants from large urban areas in the Northeast and Midwest due to its lower cost of living and the attraction of its coastal resorts.”
“The state and local governments in Georgia face less of a huge fiscal challenge than in many other countries. So state and local government are not the headwinds to growth here, as they will be in many other states, ”said Humphreys.