2021 Fulton County Environmental Scan



Over the past year, Fulton County, like much of the U.S., has seen unemployment rates drop to historic lows, growth in wages largely offset by rising consumer prices and housing prices. 

Consumer Price Index (CPI) and Annual Inflation Rate

The consumer price index (CPI) is used as a relative measure of prices paid by urban consumers for a market basket of consumer goods and services.  The CPI itself (expressed as a number such as 236) has little meaning to most people; however, the percent change in the CPI over a 12-month period is what we all know as the annual rate of inflation.  The consumer items included in the CPI are divided into eight categories including food and beverages, housing and transportation.  The CPI is also published for each of these categories individually.
The Bureau of Labor of Labor Statistics publishes the CPI for the U.S. each month and for  each of 23 selected metropolitan areas (including the Atlanta metro area) every other month.
The Atlanta metro area typically trends with other large metro areas in terms of the consumer price index. With the rise in consumer prices beginning in 2021, prices for all items in the Atlanta metro area rose significantly faster that the average for other cities. As of April 2022, the inflation rate (as the year-over-year change in CPI) had reached 10.8% for the Atlanta metro area compared to an average of 8.3% for other large U.S. cities.
Recent year-over-year increase in the CPI for the Atlanta metro area has varied considerably between the major categories of goods and services.  Among the four categories with the highest total expenditures, transportation (including motor fuel) has seen the largest increase, reaching 29% in December of 2021.  Prices related to transportation have historically been the most variable; however, the recent rate of inflation of gasoline has not been seen for decades.
Housing and food prices, historically more stable than transportation, each reached an annual rate of inflation or 9% in March/April of 2022.  The annual inflation rate in medical care reached 3% in Nov/Dec 2021.
House Price Index (HPI)
In contrast to the housing category of the CPI, the House Price Index (HPI) tracks only prices in single-family homes.  Home prices have special significance in the economy because they are fundamental to how families develop wealth.  Home-owners want to see appreciation, yet rapidly increasing prices can keep younger individuals and families out of of the market.
Though single-family home prices have increased each year since the beginning of 2012, the rate of increase began rising dramatically in the second quarter of 202o, reaching a year-over-year increase of 23% in the Atlanta metro area in the first quarter of 2022.  In comparison, the year-over-year increase for the U.S. was 18.8%. 
How long will home prices continue to rise? Answering that question requires understanding the cause or causes of the rise in prices.  Possible explanations include the following:
  • Ultra-low interest rates
  • Housing production shortfall
  • Fewer houses for sale
  • A shift in family spending towards housing
Rising interest rates and growth in home construction may help slow the rise in prices in coming months.  However, it more difficult to predict the desire of home-owners to sale or continue investing in their existing homes.
What is the House Price Index?
The FHFA House Price Index (FHFA HPI®) is a broad measure of the movement of single-family house prices in the United States. The HPI is a weighted, repeat-sales index, meaning that it measures average price changes in repeat sales or refinancings on the same properties. This information is obtained by reviewing repeat mortgage transactions on single-family properties whose mortgages have been purchased or securitized by Fannie Mae or Freddie Mac since January 1975.
- Federal Housing Finance Agency

Residential Building Permits

The number of permits issued by local authorities for the construction of new privately-owned housing units is often used as a leading economic indicator as building permits generally anticipate the construction of new homes by one to four months, though in the current climate of labor and materials shortages, the time from permit to completion is likely significantly longer.  A precipitous drop in the monthly number of building permits preceded the 2007-2009 recession.  Fulton County saw a near-continuous rise in single-family permits (based on a 12-month moving average) from 2010 to 2018.  Numbers began dropping even months before the COVID-19 pandemic hit the U.S.; however, an 8-year low was reached in May 2020, two months after the start of the pandemic. Single-family permits rebounded over the next two years, approaching pre-pandemic levels by April of 2022.  Record-low new home inventories will likely sustain the momentum in permitting and construction for some months; however, as interest rates rise and pent up demand subsides, both permitting and construction can be expected to level off in the latter part of 2022. 
Multi-family permitting as generally followed the pattern of single-family permitting since the months leading up to the 2007-2009 recession.  Because multi-family permits are often for the construction of single large developments, the monthly and even annual numbers tend to be less consistent than for single-family homes.  Still, the broad pattern has been the same and the number of permits (based on the 12-month moving average) hit a 10-year low during the pandemic before beginning to rebound at the end of 2020. 


Over the last 14 months, Fulton county along with the state of Georgia, Atlanta Metropolitan Area, and United States have seen a drop in the unemployment rate. The unemployment rate has nearly cut it in half from 2020 to the end of 2021 as the job market is becoming very tight causing companies to increase wages and benefits.
Viewed in an historical context, it becomes apparent just how low unemployment had dipped by early 2022, only two years after momentarily reaching an historic high at the beginning of the COVID-19 pandemic.  Only once in the past 30 years (in late 2000) had the proportion of the labor force that was without employment approached such low levels.


Despite apparent recent gains in weekly wages, particularly since the beginning of the pandemic, workers in Fulton County (as well as across the Atlanta metro area and the U.S.) have seen little change in real wages (wages when adjusting for inflation).  Real wages between 2016 and 2020 remained essentially flat.  So while paychecks grew, as reflected in nominal wages, purchasing power did not. 
While the most recent wage data are not yet available at the metro or county levels, the U.S. Bureau of Labor Statistics reports that nominal wages for U.S. workers were 4.9% higher in April 2022 than a year earlier while the CPI was up 8.0% over the same period, leaving workers with less purchasing power even with larger paychecks.

Employment by Sector
The COVID-19 pandemic had a disproportionate impact on employment in certain industry sectors.  Among sectors employing at least 10,000 people in the county, three experienced a drop in employment of at least 10% in the past five years: Educational services (-36.1%), Accommodation and food services (-15.5%) and Wholesale trade (-10.0%).  Others with significant decline include Art, entertainment & recreation (-8.1%) and Retail trade (-5.9%).