Unemployment news in context: 'The hole is deeper than it looks'
Governor Rick Scott returned today from his trade mission to France and was greeted with good news: the statewide unemployment rate for May 2013 dropped to 7.1 percent, the lowest rate since September 2008 and down 0.1 percentage point from April’s rate of 7.2 percent.
That means Florida's jobless numbers are below the national average, which went up to 7.6 percent in May.
But the devil is always in the details and the governor's press release doesn't include a few shades of gray. Those came out on Wednesday when the state's top economists at the Florida Office of Economic and Demographic Research, a non-partisan arm of the Legislature, issued its latest Economic Overview. Here are some stats straight from the report: Download FlEconomicOverview_6-19-13
The good news:
* State Gross Domestic Product (GDP) rose 2.4 percent in 2012, the third consecutive year of growth after declining two years in a row. Florida ranked us 14th in the nation in real growth, just slightly below the national average of 2.5%.
* Personal income in Florida grew 3.2 percent over 2011, putting the state only slightly below the national growth rate of 3.5 percent. "In percentage changes, Florida was ranked 31st in the nation." Earnings growth in the Health Care and Social Assistance industry was one of the state’s strongest performers, particularlyl in the fourth quarter.
* Population growth continues to be "the state’s primary engine of economic growth, fueling both employment and income growth" and supplying the demand for new construction. The near-term growth is expected to average 1.2% between 2012 and 2015 – and then continue its recovery in the future, averaging 1.4% between 2015 and 2020 and the state will break the 20 million mark during 2016.
* Construction and home sales are revving up with building permit activity up 51 percent over last year for the first four months of 2013 and median sales prices for existing homes posting the highest number in April in 54 months.
The bad news:
* People are dropping out of the labor market. If the workforce participation rate were the same in April 2013 as it was in December 2011, the unemployment rate would have been 8 percent in April -- instead of 7.2 percent -- because "36.4 percent of the drop in the unemployment rate is due to people dropping out of the labor force or delaying entrance."
* Scott's promise for 700,000 in seven years won't come close to bringing the state back into where it was before the recession hit. For the same percentage of workers to be working as was the case at the recent peak in the state's employment in March 2007, "it would take the creation of about 900,000 jobs."
* About 549,300 jobs have been lost since the most recent peak. "Rehiring, while necessary, will not be enough."
* Florida’s prime working-age population (aged 25-54) is forecast to add about 2,900 people per month, "so the hole is deeper than it looks."
* Foreclosures and home sales remain grim as median sales prices remain "substantially below the nation as a whole" and Florida foreclosure rate "remains daunting." Florida had the highest foreclosure rate in the nation at 34 percent, 1 percentage point higher than the national average.