Florida's unemployment rate improved for the third straight month, dropping to 11.4 percent in June, with the private sector gradually adding jobs again.
However, the state's job market is still deeply troubled, with more than 1 million actively looking for work, a growing number who have given up their search and a tidal wave of foreclosures hampering recovery of the housing industry. There's growing speculation about a double-dip recession as double-digit unemployment persists.
But Friday's jobs report from the Florida Agency for Workforce Innovation offered several glimmers of hope that the worst of the Great Recession has passed:
• For the first time since February 2006, Florida is showing monthly drops in unemployment. The state's jobless rate has retreated steadily since striking a post-World War II record of 12.3 percent in March.
• The state shed 1,900 more jobs month-to-month, but it would have added thousands if not for the loss of more than 20,000 short-term jobs with the U.S. Census Bureau. The remaining 22,000 census jobs statewide will phase out by fall.
• Health care and the federal government are no longer the only two bright spots for job seekers. Professional business services, general merchandise stores and membership organizations were also adding jobs last month.
Rebecca Rust, AWI's chief economist, noted that there were 214,000 online job postings in June, up 28 percent from a year ago. "Previously, they were almost all medical jobs," she said. "Now we're seeing quite a few sales jobs, some retail jobs and quite a few IT jobs."
Sean Snaith, an economist with the University of Central Florida, said he was encouraged that "the long, arduous task of Florida's labor market recovery is finally underway. … To see the private sector adding jobs is a reason to have some hope."
Optimism, however, is hardly universal.
Jack McCabe of McCabe Research & Consulting in Deerfield Beach envisions Florida's unemployment level fluctuating between 11 and 12 percent this year and probably through the end of 2011.
"There is nothing in the immediate future you can point your finger at and say, 'We're going to get a great shot in the arm in job creation between now and the end of the year,' " McCabe said, adding that anticipated job cuts by strained local governments will only make things worse. "You can make a pretty strong case that if you remove the temporary government stimulus and its effect on Florida, our state is still in recession," he said.
Rust, the AWI economist, said she would like to see another month's worth of data before calling the drop in unemployment a trend. "Three months in a row is a really good sign, but when you look at past recessions, it's not a smooth line," she said.
Rust cited numerous reasons recovery will be slow and uneven: Small businesses are still facing tight credit conditions; many unemployed, particularly long term, don't have skills that match available jobs; and workers are less mobile because they can't sell their homes.
Also making any prediction difficult is the growing threat of another unemployment spike as federal stimulus dollars dry up and jobless now sitting on the sidelines start looking for work again. Florida has already spent about two-thirds of its $319 billion in federal stimulus dollars, while the ranks of discouraged workers appear to be growing dramatically.
The state's labor pool shrunk by 34,000 people in June, mostly because the state's count of unemployed workers dropped by 28,000. Rust said there is no way to be certain how many of those 28,000 had temporarily given up looking for work versus those that had found other jobs or left the work force permanently.
But Scott Brown, chief economist with Raymond James Financial, said he has no doubt many took a break from their job search after exhausting their unemployment benefits in June. "To receive unemployment benefits you have to have a record of so many contacts per week that you're trying to find a job," he said. "Once those unemployment insurance benefits expire, you don't have any incentive to look if you don't think there's going to be a job available out there."
Congress let its program for extended unemployment benefits phase out starting in early May, meaning every week, tens of thousands of Floridians are losing benefits because they no longer can enter one of four tiers of federal aid. Barring congressional action, the number who have run out of benefits is expected to reach 230,000 in Florida by the end of the month.
Once Florida's economy shows signs of improving, Brown anticipates thousands will re-enter the labor pool, driving up competition along with the unemployment rate. Florida's jobless rate has been running higher than most of the country since 2008. The national unemployment rate for June stood at 9.5 percent.
Jeff Harrington can be reached at (727) 893-8242 or at email@example.com.