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From the staff of the Tampa Bay Times

What the governor isn't saying about economy: Florida GDP falling farther behind

5

August

A news release out today from Gov. Rick Scott touts Florida's as "beating the national GDP growth rate of 1.2 percent" and outpacing the nation "in economic growth." 

Indeed the state's Gross Domestic Product (GDP) grew 2.1 percent annualized in the first quarter of 2016, compared to the nation's which is at 1.9 percent.

But what the governor is not saying: the reason the fast-growth numbers are even happening is because Florida has so far to go to catch up to the national average. 

According to the Bureau of Economic Analysis, which posts quarterly and annual GDP data for the United States, Florida’s GDP rate was the 10th fastest growing GDP in the nation in the first quarter of 2016, behind Arkansas, Washington, Oregon, Colorado, New Hampshire, Arizona, Utah and Massachusetts.

Gross domestic product, or GDP, is a key way to measure economic growth. It is the sum total of a state's economic activity and it is important because it includes includes the wages and salaries that workers earn as well as the income earned by individual entrepreneurs and by corporations. 

When you consider the growth of the GDP compared to the growth of the state's population, Florida has lagged behind the national GDP average for years. But rather than remain stable or narrow since the recession, the gap is widening. The only conclusion is: Florida's is falling farther and farther behind the rest of the nation. 

Between 2003 and 2015, Florida's per capita GDP dropped from $40,368 to $38,950, according to the BEA data. By comparison, the national average per capita GDP increased from $45,858 in 2003 to $49,844 in 2015 -- despite the recession. During that time, the gap between Florida's per capital GDP and the nation's doubled. And since Scott took office, Florida has dropped 18 percent more behind the national average in 2015, than it was in 2010. 

These GDP gaps between the national average and Florida's occurred during the time both Jeb Bush and Charlie Crist were governor. But, while Florida's GDP had been improving until 2006, the numbers show the gap has widened dramatically since then. Here's the data, from the U.S. Department of Commerce Bureau of Economic Analysis:

Florida Per Capita Gross Domestic Product

Area

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

Florida

40368

41623

43333

44038

43729

41579

38771

38396

37627

37790

38197

38664

38950

United States

45858

47037

48090

48909

49126

48401

46680

47287

47586

48160

48397

49110

49844

Difference

-5490

-5414

-4757

4871

-5397

-6822

-7909

-8891

-9959

-10370

-10200

-10446

-10894

Source: U.S. Department of Commerce Bureau of Economic Analysis

In 2003, the gap between the national GDP and the state's was $5,490 per person but, since then, even as parts of Florida’s economy recovered, the per capita GDP has declined. The number inched slightly upward in 2012 and 2013, but the gap between Florida and the U.S. average has nonetheless widened steeply.

The governor told the Republican convention that the national "economy is not growing." PolitiFact rated that false, noting the U.S. has seen GDP has grown every year since 2010, between 1.5 and 2.5 percent a year. Florida's has risen too, since 2011, but the amount of goods and services produced in Florida continues to lag behind many other states and the national average. 

 

Here's how the BEA defines its GDP measure: "an industry's GDP by state, or its value added, in practice, is calculated as the sum of incomes earned by labor and capital and the costs incurred in the production of goods and services. That is, it includes the wages and salaries that workers earn, the income earned by individual or joint entrepreneurs as well as by corporations, and business taxes such as sales, property, and Federal excise taxes—that count as a business expense."

Here's the governor's press release: 

Gov. Scott: Florida’s Private Sector Grew Faster Than All Large States in June; Florida’s GDP Growth Beats the Nation’s

TALLAHASSEE, Fla. - Governor Rick Scott announced today that Florida businesses had the fastest annual private-sector job growth rate of the 10 most populous states, tied with Georgia, in June. Florida’s private-sector job growth rate of 3.2 percent is significantly higher than the nation’s, which is at 1.9 percent. Governor Scott also announced that Florida’s Gross Domestic Product (GDP) grew 2.1 percent annualized in the first quarter of 2016, beating the national GDP growth rate of 1.2 percent. The state’s GDP annualized growth rate was second-highest among the 10 largest states, beating both California and Texas.

Governor Scott said, “Not only is Florida’s private sector growing faster than other large states, but our job growth rate is also growing 68 percent faster than the nation and our labor force is increasing faster than the national average. Florida’s GDP growth is also surpassing the nation, as well as Texas and California. We have made it a priority to do all we can to make it easier for job creators to bring new opportunities to families across the state. As Florida continues to outpace the nation in economic growth, we will continue to do all we can to make Florida the number one place for jobs.”

Florida created 226,900 jobs in the past year, nearly doubling Texas’ 123,000 jobs in the same period. This is the 14th consecutive month that Florida has created more private-sector jobs over the year than Texas. Since December 2010, Florida businesses have created 1,127,400 private-sector jobs. In June, the unemployment rate was 4.7 percent, Florida’s lowest rate in more than eight years.

Florida Department of Economic Opportunity Executive Director Cissy Proctor said, “I am proud that Florida once again leads the nation’s largest states in job creation. Florida continues its positive economic growth, with increasing GDP and job creation, a declining unemployment rate and strong job openings. Our economy is consistently among the strongest in the nation and we will continue investing in a bright future for Floridians.”

Florida’s GDP growth in the first quarter of 2016 marks the 11th consecutive quarter of positive GDP growth in Florida. Florida gross domestic product is the measure of the market value of all final goods and services produced within the state in a given time period. A final product is one that is produced and sold for consumption or investment. GDP excludes intermediate goods, which are goods that are used to produce other goods. GDP is presented in both nominal and real dollars. Real GDP removes the influence of changing price or inflation. GDP is important because it is the most closely watched measure of output.  It is a measure of overall economic activity.

[Last modified: Friday, August 5, 2016 3:43pm]

    

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