Georgia’s economy is expected to experience another year of slowed growth due to ongoing uncertainties in trade policy, immigration regulations, and labor market dynamics, according to experts speaking at the University of Georgia Terry College of Business’ annual economic forecast event. Despite these headwinds, the state continues to outperform national averages and maintains positive momentum. Santanu Chatterjee, interim dean at Terry College, emphasized that while expansion is moderating, Georgia benefits from a diversified economic base, skilled workforce, and supportive business climate.
Key sectors driving the state forward include transportation logistics, defense infrastructure, and data center development. Georgia is on track to surpass Virginia as the leading destination for data centers, fueled by demand for artificial intelligence applications. To support this surge, Georgia Power has proposed expanding energy production capacity—a move currently under review by the Public Service Commission. However, questions remain about how automation and AI advancements will affect long-term employment prospects in these high-tech industries.
Fort Benning, one of the largest employers in the state, underscores Georgia’s significance in national defense spending. Meanwhile, transportation hubs continue to attract investment and create jobs. Chatterjee pointed to structural challenges such as slowing population growth and a contracting labor force, which elevate near-term recession risks. He also projected a notable decline in home prices by 2026, attributing it to an oversupplied housing market and inflated valuations that may require correction.
Both Chatterjee and National Retail Federation economist Mark Mathews highlighted that shifts in immigration and tariff policies contribute to market uncertainty, though neither alone is likely to trigger a downturn. Debt levels remain under control overall, with credit card obligations considered affordable for most households. Auto and student loans, however, represent major contributors to household indebtedness.
Additionally, both Georgia and the U.S. may see little to no population growth in the coming year, meaning workforce replenishment will depend on internal mobility rather than new entrants. Although job creation has cooled, firing rates have also declined, keeping unemployment steady.
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Is Georgia’s economy slowing? What experts say about state’s ‘uncertainty’
Georgia ‘s economic growth is expected to slow for the second year in a row following “uncertainty” in tariff policy, immigration and the labor market, experts said Wednesday.
At the annual Georgia Economic Outlook, hosted by the University of Georgia Terry College of Business, business leaders, academics and economists gathered to forecast where the state ‘s economy is headed under the watchful eye of stingrays and belugas at the Georgia Aquarium.
Terry ‘s Interim Dean Santanu Chatterjee was joined by Mark Mathews, chief economist and executive director of research at the National Retail Federation, to put the 2025 economic year into perspective and make predictions for how the next year could play out.
Here is what they said.
High earners boost consumer spending nationally
Despite low consumer sentiment, retail spending has not slowed down, Mathews said.
The drop in consumer sentiment — how consumers feel about the economy, their personal finances and their savings — started during the pandemic and has since continued to decline as people notice higher prices at the grocery store or the gas station, and higher debt with lower savings. But, these feelings are “disconnected” from trends in the retail market, Mathews said.
“Consumers are spending. They ‘re not feeling great, but the consumer is really the bright spot in the economy,” he said. Economists are seeing “the highest percentage contribution toward GDP from consumer spending that we ‘ve seen in the last 15 years.”
Consumers bring a lot of this spending momentum into the holidays, where some companies will make up to 20% of their profit in the last quarter, according to Mathews.
High earners, however, are carrying most of the weight behind consumer power. In 1990, the top 10% of earners accounted for about 37% of total consumer expenditures, Mathews said. Today, that same group makes up 50%.
This is called a “K-shaped” economy, when the spending of high earners masks the decreased spending of low and middle income households, according to Mathews.
Mathews also said part of the disconnect between positive economic reports and American ‘s lived experiences comes from data being analyzed year-over-year, while many consumers compare the price of necessities to costs five or ten years ago.
Transportation, defense, data centers keep Georgia ahead
In Georgia, economic growth has slowed but the state still outpaces national trends and remains in the positive, according to Chatterjee.
“Growth will be slow because of uncertainty related to trade policies, a slowdown in population growth, decline in the size of the labor force and slower overall growth of the U.S. economy,” Chatterjee said. “These factors will keep the risk of recession at an elevated risk in the near term, as in years past.”
Georgia is being courted for data centers, and is set to surpass Virginia as the top state for data center development, much of which is used for artificial intelligence, Chatterjee said. The Public Service Commission recently considered a pitch from Georgia Power to expand power production to handle the projected drain from data centers.
There is uncertainty, however, on what these data center investments will mean for the job market as artificial intelligence improves.
Other industries, like transportation hubs, are moving into Georgia, creating jobs and investment in the state. Georgia also remains a major hub of defense spending as sites like Fort Benning hold a major military presence. Fort Benning is one of the largest employers in the state, Chatterjee said.
“Georgia’s economy is resilient and well diversified with a workforce with wide-ranging skill sets, a business-friendly policy environment and a world-class higher education network with top universities and trade schools,” Chatterjee said. “This gives us much hope for the future.”
Other key highlights
Both Chatterjee and Mathews noted that immigration and tariff policy changes have contributed to generalized uncertainty in the market, but that neither of these factors alone were enough to pull the state and country into recession.
Debt was also considered generally manageable, Mathews said, and credit card debt is considered affordable for most households. Major drivers of significant debt come from auto and student loans, he said.
Both the state of Georgia and the United States also face a year where the population likely won ‘t grow, so as the older generation leaves the workforce people will fill those roles internally. Fewer jobs are hiring, but fewer people are also being fired, both financial experts noted, so the lower job creation numbers are not increasing the unemployment rate for now.
Home prices in Georgia are likely to decrease significantly going into 2026, Chatterjee said. The market has become inflated and the supply of homes mean costs must come down to get some of them off the market.
The full economic outlook report from the UGA Selig Center for Economic Growth can be found here.
Irene Wright is the Atlanta Connect reporter with USA Today’s Deep South Connect team. Find her on X @IreneEWright or email her at ismith@usatodayco.com.