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Florida employment picture murky despite jobs boost

Has Florida's job picture brightened over the past year?

Snapshot 1: State figures released Friday showed unemployment remained stuck at 11.9 percent in October. Yet on the plus side, 6,900 net jobs were added over the month and 33,700 over the year. That puts us in the strongest job creation mode since the onset of the recession three years ago.

Snapshot 2: A Labor Department survey used to estimate unemployment rates indicates there are 17,000 fewer people employed in Florida than a year ago, 6,000 fewer over the last month alone. The state's labor pool isn't growing in tandem with a growing population as more discouraged workers have taken themselves out of the job hunt. If and when they return, that could drive unemployment back up toward the record 12.3 percent set in March.

Turns out both scenarios are true.

It's an illustration of the shortcomings and conflicts within the two surveys used to dissect the state's employment picture every month: a household survey and input from employers commonly called the establishment survey.

The household survey, which is used to calculate unemployment rates, includes the agriculture industry and the self-employed. It estimates the number of employed and unemployed, not jobs per se. The establishment survey omits agriculture and the self-employed, but is viewed as more statistically sound in counting jobs.

"The two surveys are so different in terms of measurement: one measures jobs and one measures people. But over time, when you look at them graphically, they support each other for long-term trends," said Rebecca Rust, chief economist of the Florida Agency for Workforce Innovation, which disburses unemployment benefits and tracks job trends.

University of Central Florida economist Sean Snaith agreed the two measurements tend to run in tandem — except in turning points in the economy such as now.

"This is largely a sign that the labor market is improving, but improving at a snail's pace," Snaith said. "Job creation is still anemic but at least the unemployment rate was stable. … Jobs year-over-year are higher and we're not in a contraction mode."

One reason for the disconnect between the two surveys could be that more people are taking more than one job in an era of stagnant incomes. That helps prop up the jobs number in the establishment survey (for example, someone with three jobs is counted three times), but it does little to fight the core issue of unemployment.

"Given how long the unemployment rate has remained as high as it has, it may be some of the improvement we're seeing in (the establishment survey) may simply be people taking part-time jobs. We don't get that level of detail in the monthly labor report," Wells Fargo senior economist Mark Vitner said.

Vitner noted that most of Florida's job growth has occurred in three industries that tend to have a lot of part-time employment: education/health care, leisure/hospitality and tourism and trade.

Another issue that muddies the job picture is the shifting size of the labor pool that could make unemployment statistics look better than they are. The "labor pool" or "labor force" represents workers who either have a job or are looking for one.

Case in point: The Tampa Bay area's unemployment rate dropped from 12.4 percent to 11.8 percent in October. Part of that was due to a burst in holiday hiring. (Unlike state figures, the regional data is not seasonally adjusted and tends to fluctuate more month to month.)

But part of the drop in the rate may also have been due to a shrinking labor force. Tampa Bay added 7,200 jobs over the month, but at the same time its labor force contracted by nearly 17,000.

Statewide, the labor pool hasn't shrunk over the year, but neither has it kept up with the rising population.

Over the past year, Florida has added nearly 100,000 in the 16-and-up age group, but the labor pool has only grown by 31,000. And the gap seems to be growing. Between September and October, the 16-and-up population in Florida (taking away those in prison) rose by 10,000. At the same time, the labor pool fell by 11,000.

Rust said a drop in the labor force by itself isn't enough to assume there are more discouraged workers.

To Vitner, the best you can say given the falling labor force is that the rate of job losses in Florida has stabilized: "The decline in economic activity has been arrested and there may be some modest growth," he said, "but the growth isn't even keeping up with the population."

Based on a federal calculation, Florida's unemployment rate would be 8 percentage points higher this month, or 19.9 percent, if it included those who had given up looking for a job or were working part-time but desired full-time employment.

On Friday, the Agency for Workforce Innovation focused on some of the more encouraging information from the establishment survey that shows we're adding jobs.

• Job creation once again was led last month by private education and health services (up 29,800 jobs or nearly 3 percent from a year ago). Close behind, however, was a bounce back in leisure and hospitality (up 25,500 jobs).

• Biggest job losers compared with a year ago are construction (down 13,800 jobs) and financial activities (down 11,400 jobs). After some scattered signs of improvement, Florida lost a net 8,600 construction jobs between September and October.

• Through much of the recession, health care/education and government were the only industries in positive territory. But over the last year, five of the 10 industries tracked in Florida added jobs.

Overall, state officials were upbeat.

Cynthia Lorenzo, director of the Agency for Workforce Innovation, said new jobs weren't the only sign of stabilization and growth. Florida also posted the largest drop in the country last week in the number of people filing first-time unemployment benefits.

"Combined with increasing numbers of job postings online, this is encouraging news for our job seekers and our economy," Lorenzo said.

Florida's unemployment peaked at a post-World War II record of 12.3 percent in March, before gradually falling to as low as 11.4 percent in June, thanks in large part to part-time jobs created by the U.S. Census Bureau and the federal stimulus plan.

The jobless rate began creeping up as part-time jobs have gone away. As of last month, only 91 Census jobs were left in Florida.

.FAST FACTS

County-by-county unemployment rates

Region Oct. 2010 Sept. 2010 Oct. 2009

Citrus 13 percent 13.7 percent 12.9 percent

Hernando 14.3 percent 14.9 percent 14.1 percent

Hillsborough 11.5 percent 12.3 percent 11.8 percent

Pasco 12.7 percent 13.2 percent 12.6 percent

Pinellas 11.5 percent 12 percent 11.5 percent

Hendry (highest) 18.3 percent 19.9 percent 16.9 percent

Liberty (lowest) 6.9 percent 7 percent 6.1 percent

Tampa Bay* 11.8 percent 12.4 percent 11.9 percent

Florida 11.9 percent 11.9 percent 11.4 percent

Nation 9.6 percent 9.6 percent 10.1 percent

*Combines Hernando, Hillsborough, Pasco and Pinellas counties

Note: County and Tampa Bay area numbers are not seasonally adjusted. Florida and U.S. numbers are seasonally adjusted.

Source: Florida Agency for Workforce Innovation

Florida employment picture murky despite jobs boost 11/19/10 [Last modified: Friday, November 19, 2010 9:57pm]
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