Just when it seemed like Florida’s unemployment rate couldn’t get lower, it did. According to the state figures out Friday, Florida’s jobless rate dipped to a near 18-year low of 3.8 percent in May after holding steady at 3.9 percent for seven months.
But with an increasingly tight job market, largely stagnant wages and a growing risk of inflation, economists say it may be difficult to move the needle much further.
"It’s harder to reduce the unemployment rate in Florida than most other states because we have so many job seekers moving to the state each year," said Mark Vitner, economist at Wells Fargo.
That constant influx of workers, Vitner said, is what sets Florida apart from other states with low unemployment. Florida is currently in the middle of the pack for jobless rates — No. 22. Hawaii had the lowest rate in May at 2 percent, while Alaska clocked in with the highest at 7.2 percent.
Nationally, the unemployment rate was 3.8 percent last month.
In May alone, 23,000 employees joined the labor force, helping Florida to grow about one-and-a-half times as fast as the national economy, which Vitner said is typical for the Sunshine State.
"Florida typically outperforms the nation in terms of job growth year-in and year-out unless real estate gets overbuilt and comes crashing down," he said.
Tampa Bay’s unemployment rate was 3.3 percent in May, up a notch from 3.2 percent the previous month.
All of the area counties’ jobless rates held steady from last month: Pinellas County’s rate was 3.1 percent, Pasco County’s rate was 3.6 percent, Hillsborough County, 3.2 percent and Hernando County, 4.2 percent.
Among the wild cards to keep the unemployment rate so low, said Raymond James economist Scott Brown, is how the Federal Reserve acts.
"It’s very difficult to get the balance exactly right" in deciding when to raise interest rates, he said. "Ultimately we’re looking at the economy having to slow down at some point and if the Fed doesn’t act soon enough, then you start seeing inflationary measures."
Any such effects, Brown said, likely won’t be felt until 2019.
Another piece of the puzzle is wage growth. Typically, firms increase wages to better attract candidates when the labor market is tight. But that hasn’t happened on a large scale in recent years.
"Highly skilled labor positions — those wages are rising," Brown said. "But we’re not really seeing a broad-based acceleration."
Instead, some firms are offering signing bonuses and extra perks in lieu of pay increases.
According to the Florida Department of Economic Opportunity, the state added 15,100 jobs over the month and is up 180,200 jobs year-over-year.
Among the sectors that added the most jobs over the year were professional and business services (39,200 jobs), leisure and hospitality (37,200 jobs) and construction (31,300 jobs). Florida has the third-highest number of construction jobs added over the year after California (50,000) and Texas (43,100), according to the Associated General Contractors of America.
Information was again the only sector to lose jobs over the year (2,200 jobs), most of which, Well’s Fargo’s Vitner said, were in print media and landline telecommunications firms.
Tampa Bay has added 30,400 jobs over the last 12 months, the second-highest total among major metros after Orlando.
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