A shrinking workforce — not job creation — accounts for 91 percent of the drop in Florida's unemployment rate so far this year, according to new projections from state economists.
Florida's unemployment rate dropped from 9.9 percent in December to 8.8 percent in July. The rate, however, would be little changed at 9.8 percent if not for a substantial number of people dropping out of the labor force, according to the Florida Legislature's Office of Economic and Demographic Research.
Economists believe many of those dropouts are not retirees or disabled, but discouraged workers who have only temporarily given up searching for work. When they return to their job hunt, it would invariably drive up competition and, presumably, the unemployment rate.
The theme is a recurring one for the legislative office. Earlier this summer, the office estimated that roughly 70 percent of the drop in Florida's unemployment rate was attributed to the shrinking labor pool.
Wednesday's report provides more fodder for those who contend Florida's jobs recovery this year under Gov. Rick Scott has been overstated. Scott has repeatedly touted his efforts at job creation and bringing down Florida's unemployment rate at a faster pace than the national jobless rate.
The August unemployment report is scheduled to be released Sept. 21.
The jobs snapshot was included in a long-range financial outlook released Wednesday. Among other highlights, the demographic researchers forecast:
• Population growth will continue to fuel economic recovery, but growth will average just 1.2 percent over the next three years, far shy of the 3 percent-plus growth between 1970 and 1995. More than half of the newcomers to Florida (about 57 percent) will be at least 60 years old.
• With the average foreclosure taking 861 days to wind through the system, Florida's housing recovery will still be labored. Nearly half of all mortgage loans are for homes in which the owners owe more than the property is worth.
• Credit conditions remain tight, with roughly 93 percent of loan officers surveyed telling the Federal Reserve that their credit standards are basically unchanged.
• The state's general revenue is projected to grow near or just below 5 percent over the next three years.
• A severe hurricane season, a financial collapse in the eurozone or a congressional standoff over a year-end "fiscal cliff" deadline to reach an agreement on spending cuts could all threaten forecasts. But the research office classified those scenarios as "Black Swan" events with "low probability."
Jeff Harrington can be reached at (727) 893-8242 or [email protected]