(The Center Square) – Georgia’s economist is forecasting slow job growth and higher inflation in part because of tariffs and monetary easing, an economist told Georgia lawmakers on Tuesday.
The state can expect slow growth of the real Gross Domestic Product and modest income growth, state economist Dr. Robert Buschman said during a joint meeting of the appropriations committees from the Senate and House of Representatives. Businesses may also see slower growth, which could lead to record levels of bankruptcies.
Tariffs are causing some of the economic woes, Buschman said. As of August, 29% of the costs of tariffs were passed on to consumers, 53% were absorbed by U.S. businesses, and only 18% was absorbed by foreign producers.
Tariffs are negatively affecting inflation and are the reason December’s inflation reading was 2.7% rather than the Federal Reserve’s 2% target, he said.
“As time passes, businesses, both domestic and foreign have to pass more of the cost onto consumers to remain profitable,” Buschman said. “So we’ll see continuing upward pressure on consumer prices.”
Job growth has slowed since September, with the Peach State losing about 7,000 jobs from September through November, he said. Consumer sentiment is weak, according to Buschman.
“The University of Michigan Consumer Sentiment Index is sitting at levels, typically associated with inflation,” Buschman said.
The January survey shows consumer sentiment at 54%, up slightly from December but 24.7% lower than in January 2025, according to the University of Michigan.
Rep. Kasey Carpenter, R-Dalton, asked if some of the issues are related to social media.
“Well, I suppose that social media is at least partly to blame for people being just generally uncomfortable about the direction of the country from either side,” Buschman said. “But I think the real problem is that income for most Americans has not really kept up with inflation over recent years.”
Gov. Brian Kemp acknowledged that families are facing high prices.
Georgia’s conservative budgeting, the refusal to grow government and paying off debt have kept the state fiscally healthy, allowing the state to offer more tax breaks to help residents, Kemp told the panel before Buschman’s presentation.
The governor reiterated his proposal for two additional tax breaks to the committees. One would reduce the state’s flat tax rate to 4.99% three years ahead of schedule, which would return $770 million to taxpayers annually.
The second tax break would give Georgians a one-time rebate ranging from $250 for single filers to $500 for married couples. It would return $1 billion to taxpayers and is the same rebate given last year, Kemp told the committees.
The General Assembly is not meeting this week as the appropriations committees hear from state departments about their budgets.
