Florida's brief and shallow economic recovery of 2011 has reversed course this summer.
Unemployment has risen slightly, and more than a fourth of the jobs gained statewide since January were wiped out last month.
The jobless rate stood at 10.7 percent in July, representing 987,000 unemployed out of a labor force of 9.2 million, according to figures released Friday by the Florida Agency for Workforce Innovation, which oversees the distribution of unemployment checks as well as statistics.
That was unchanged from June's rate, but that's because June's number was upwardly revised on Friday from 10.6 percent to 10.7 percent. In the Tampa Bay area, the July jobless rate was unchanged at 11.1 percent, while the U.S. unemployment rate was at 9.1 percent.
In another sign of a sluggish labor market, Florida lost 22,100 jobs from June to July, second in the country only to Illinois, which shed 24,900 jobs. Counting gains earlier this year, the state is still up a net 64,300 jobs since January. But the reversal alarmed some economists tracking Florida.
University of Central Florida economist Sean Snaith said the drop in jobs, about half of them tied to government cutbacks, was steeper than many expected.
"Consumers are suffering from post-traumatic financial stress disorder," Snaith said. "With the recent debt ceiling debacle and all the volatility in financial markets, we're seeing a bit of a flashback to the 2008 financial crisis and the fear it created."
Next month's unemployment report, Snaith warned, could be even worse as both Wall Street and Main Street fret about the threat of a double dip recession. Europe's debt crisis, low consumer confidence, a housing market still seeking a bottom and roller-coaster stock markets are all fueling anxiety.
On Friday, Wells Fargo chief economist John Silvia was the latest to pare back expectations of economic growth, forecasting the country's GDP would grow a meager 1.1 percent in 2012, down from an earlier prediction of 1.9 percent.
Charles "Chuck" Winscott, 60, who has been looking for a job as a legal assistant since he was laid off in October, thinks small businesses are holding off on hiring because of growing uncertainty.
A onetime small business owner himself, Winscott said he can understand the reluctance when companies don't know what will happen with taxes, with health care, with the weak economy in general.
"The chairman of the Federal Reserve makes a statement in a speech that he doesn't know what to do. What's a small business person to think if the No. 1 banker in the country doesn't have an answer?" said Winscott, who lives in Oldsmar. "It's never been like this before."
Florida's unemployment rate only tells part of the picture in its ongoing jobs crisis. Add discouraged workers who have given up looking so they're no longer counted plus those working part-time jobs because they can't find full-time work and the rate would be closer to 19 percent.
Since unemployment peaked in December at 12 percent, the state has been gradually whittling down the rate and adding jobs until now. But the Agency for Workforce Innovation downplayed concerns of a worsening economy.
Rebecca Rust, the agency's chief economist, pointed out it was the first monthly job loss of 2011 and, compared to July 2010, the state is still up more than 28,000 jobs. "You have to look at a long-term trend and not a small monthly loss," she said in a conference call with reporters Friday afternoon.
Gov. Rick Scott was undaunted by the latest numbers.
"It's disappointing that they didn't go down," Scott said in an interview. "The positive is we're still (averaging) about 9,000 (new jobs) a month. But we still have 900,000 people out of work. We need to keep working at it every day."
Cynthia Lorenzo, the agency's director, was likewise optimistic that a jobs recovery since Scott took office in January hasn't necessarily been derailed.
"Mixed signals from economic indicators during recovery are common," Lorenzo said. "Fluctuations in rates of unemployment and job growth are typical examples of starts and stops while the economy rebounds and unemployed workers who may have given up looking for work rejoin the work force."
So does that mean the discouraged have begun returning into the work force?
"Not at all," said Scott Brown, chief economist for Raymond James Financial in St. Petersburg.
In fact, he said, it's just the opposite. Florida's labor pool — those who have a job or are actively seeking one — shrunk by 15,000 people this past month at the same time the state's working age population grew by 12,000.
In the past 12 months, Florida's working age population (16 and up, not including those in institutions) increased by 139,000, but its labor pool still retracted by 1,000.
To be sure, many of those who left the work force had retired, had become disabled or otherwise have no plans to seek a job again any time soon.
Brown, however, sees thousands of discouraged workers who will re-enter the labor pool at some point, driving up unemployment again.
By his calculations, about half the drop in unemployment since the end of last year is because of reduced labor force participation. He surmises much of it is due to individuals who have maxed out on unemployment benefits so they stopped looking for work.
"To be counted as unemployed, you have to not have a job and be actually looking for a job," he said. "That's coincidentally the same qualifications to receive unemployment benefits. If they drop out (of receiving unemployment payouts), many have given up looking. That's still going on."
The latest jobs snapshot was affected in no small part by cutbacks in government spending.
The biggest job loser was construction, down 23,000 jobs since July 2010. Some of that was connected to dwindling federal stimulus funds.
Government was down 16,900 jobs compared to a year ago, most of them part-time U.S. Census jobs which have long since been phased out. State government, which has been paring back to save money, is down 1,500 jobs over the year.
On the job creation side, leisure and hospitality still lead the way, up 41,800 jobs over the past year. But even the leisure industry couldn't escape the summer slump, shedding 4,800 jobs this past month.
Times staff writer Michael C. Bender contributed to this report. Jeff Harrington can be reached at email@example.com or (727) 893-8242.