Thursday, January 18, 2018
Business

Florida unemployment drops to 7.8 percent in January

Two months have passed since Florida glimpsed how its long-suffering jobs market was faring.

It was worth the wait.

The state's unemployment rate dropped to 7.8 percent in January — the first time it fell below the national jobless rate in five years. A major revision also shows the state added about 80,500 more jobs last year than originally estimated.

The revised report indicates Florida added 135,400 jobs during 2012 (up from an earlier estimate of 54,900 jobs); the Tampa Bay metro gained 27,600 jobs (up from an estimate of 21,000).

And the momentum continued into 2013.

Florida added 15,400 jobs in January alone. Trade, transportation and utilities — a broad category that includes every retailer from auto dealers to furniture stores — has led the way, adding 35,300 jobs since January 2012. Even the decimated construction industry is growing again as the housing market regains its footing.

"This was a jobs report the governor could hang on his refrigerator," said University of Central Florida economist Sean Snaith. "It's a pretty good start to 2013."

Tampa Bay's jobless rate ticked up slightly to 8 percent, from a revised 7.9 percent in December. However the revision indicates the bay area has added 31,200 jobs over the past year, more than any other Florida metro. The Orlando region was second with a gain of 20,200 jobs.

"Everything we do is geared toward job creation. Today we have more proof that it's working," Florida Gov. Rick Scott said in a statement Monday. "We have added more than 280,000 private-sector jobs over the last two years, and as we continue to focus on greater economic growth, we will see even more jobs created."

Mekael Teshome, an economist with PNC Financial Services who focuses on Florida, cited an uptick in consumer spending and a healthy tourism season as contributors to a "better-than-expected" report.

Yet what stood out more than anything, Teshome said, was the rebirth of the construction industry. Over the year, construction is up 7,400 jobs statewide, including 2,200 new jobs in January alone. Last year at this time, Florida's construction industry was still contracting and the Tampa Bay area held the dubious distinction of losing more construction jobs than any other metro in the country.

"It's been a broad-based recovery, but the core driver… is the housing sector recovery is in full swing," Teshome said. "Home prices are rising. Even housing starts are rising. That's critical."

Snaith, the UCF economist, said several Florida home builders have recently told him they need to hire more field workers to keep up with demand.

In recent speeches, Snaith has been predicting 2013 would be Florida's cross-over year of economic recovery, the point where its unemployment falls below the rest of the country. "Is it happening a little bit sooner than I thought? Maybe."

Florida still has a long way to go. Both the state and national unemployment rates would have to drop to 6 percent or lower before approaching a level that typically signifies a healthy economy.

Moreover, there's a big caveat to the falling unemployment rate: The percentage of the working age population in the labor force fell dramatically during the Great Recession and has yet to recover. In other words, untold thousands of Floridians who have stopped looking for work are no longer counted among the jobless.

To find some of those sidelined workers, look no further than population estimates that were included in Monday's update. Florida's working-age, civilian population of 16-and-up has grown by 218,000 over the year but the labor force has only grown by 96,000 over the same period.

Some of the difference will be retirees and other people not interested or unable to work. But any discouraged workers who eventually resume their job hunt are added back into the mix and would become a drag on the unemployment rate.

Although the state doesn't include average salaries in its analysis, the recovery has created more jobs in industries like leisure, hospitality, retail and home health care that pay less on average than the jobs lost in construction, manufacturing and information services. That trend has abated somewhat in recent months as the recovery has grown more broad-based.

The national unemployment rate was 7.9 percent in January. It retracted further to 7.7 percent in February. Florida reports its February numbers on March 29.

As it does every year at this time, Florida delayed its jobs report to make federally-required adjustments to the previous year's numbers.

The process, known as benchmarking, gives a more accurate read on job creation and unemployment.

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