After a dismal July, Florida is adding jobs again — even faster than the rest of the country.
It's just not enough to make a dent in the state unemployment rate, which is expected to get worse before it gets better.
The state's unemployment rate for August remained at 10.7 percent for the third straight month, the sixth-highest rate in the country, according to figures released Friday by the Florida Agency for Workforce Innovation (AWI).
That's down from a peak of 12 percent in December, but don't look for it to fall much further anytime soon, according to the Florida Economic Estimating Conference. In a revised outlook, the group of statewide economists now predicts unemployment will rise to 11 percent by the end of this year and only drop down to 10.6 percent by the end of 2012. Essentially where we are now.
"Their overall optimism has been pulled back to some degree," said Rebbeca Rust, chief economist with AWI.
Among reasons for their pessimism:
• The sidelines are filled with discouraged workers ready to re-enter the job market whenever there are signs it's improving, which would drive up the unemployment rate. Also on the sidelines temporarily: More young people are either staying in school longer or delaying their entry into the labor force. Rust pointed out that the labor force participation rate among youths has fallen to its lowest level since the 1940s.
• The wind-down of military spending overseas is expected to curtail defense spending overall. U.S. Central Command at Tampa's MacDill Air Force Base, for instance, expects to reduce its staff here by about 1,100 positions in the next three to four years.
• More government cutbacks are anticipated as local and state governments budget for a low- to no-growth environment.
• Manufacturing, one of the early drivers of recovery, has stalled amid rising concerns of falling into another recession.
• The housing market remains troubled, with foreclosure filings rising 5 percent statewide between July and August (and 27 percent in the bay area over the same time), according to a RealtyTrac report.
Mark Vitner, senior economist with Wells Fargo Securities and longtime observer of Florida's economy, said it was encouraging that the state managed to add 9,900 jobs in August — a month that job creation was flat nationwide due in part to a Verizon strike. Florida "seems to be holding up a little better" than much of the country during this summer slowdown, Vitner said. Not only are all major Florida metros adding jobs again, but the rebound is broad-based.
"We're adding more jobs in professional services, which really is the bread and butter in Florida with regional offices," he added.
Then again, Vitner points out, the job gain numbers are somewhat inflated because if someone is working two or three part-time jobs, each one is counted as a separate job in the official count.
"It's going to take the better part of a decade for us to recover the losses we've seen in this recession," he said. "We're not going to get back to full employment before the end of this decade."
University of Central Florida economist Sean Snaith described Florida's unemployment as stuck in a "purgatory of sorts."
"The only plus side from last month to this month is that the private sector started hiring again," Snaith said. "But government payroll cuts continue to weigh down overall job growth in the state."
Federal, state and local government led the way among job losers last month, down a combined 20,400 jobs since August 2010. But government wasn't alone. The decimated construction industry is still shedding jobs, down another 17,600 positions year over year.
On the positive side, the tourism industry continues to lead the pack in job creation, up 46,400 jobs over the year. Other growing industries include private education/health services (up 22,200 jobs) and trade, transportation and utilities (up 11,200 jobs).
The U.S. unemployment rate was 9.1 percent in August, unchanged from July.
Jeff Harrington can be reached at (727) 893-8242 or [email protected]