Friday, June 22, 2018
Business

Florida unemployment falls sharply to 9 percent

As Florida's job market continues its steady improvement from horrendous to merely challenging, perhaps the most encouraging sign is this:

We're no longer a national poster child as one of the worst of the worst.

With Florida's unemployment rate dropping sharply to 9 percent in March, the state has significantly narrowed the gap with the U.S. unemployment rate of 8.2 percent.

A little over a year ago, Florida's unemployment was tracking almost 2 percentage points higher than the national rate, and it was lagging in job creation as well.

Now, it's looked at as outperforming most others. Only Alabama and Michigan have posted bigger drops in their unemployment rate over the past year.

"Even if you look at payroll growth … throughout the year, (Florida) has been stronger than average. I believe the state will continue to recover at a faster pace," said Mekael Teshome, an economist with PNC Financial Services Group who tracks the state.

He's not surprised, he said. "With Florida having dropped so steeply … the bounceback was likely to be higher."

There are still a handful of states plagued with double-digit unemployment. Nevada is the worst with 12 percent, followed by Rhode Island at 11.1 percent and California at 11 percent. But Florida dropped into single-digit unemployment in December and hasn't looked back.

In fact, the jobless rate decline from 9.4 percent in February marks the state's biggest month-to-month improvement in nearly 10 years. It's now at the lowest point since January 2009.

Florida added a net 10,800 jobs between February and March, the 20th consecutive month of job growth after three years of contraction.

By comparison, the performance nationally was far more mixed: 29 states reported job gains in March while 20 states lost jobs.

In the early stage of recovery, Florida lagged in large part because of the housing bust. So why is it now starting to do better than the rest of the country?

Teshome, for one, credits in-migration. More incoming residents increase the demand for services, which creates more jobs.

Also helping, he said, is growing international trade and an increase in disposable income after households have worked for years to pay down debt.

After months of relying on health care and then tourism as job creators, Florida's recovery has become increasingly broad-based. Last month, the most jobs were created in trade, transportation and utilities (up 30,400 jobs year over year).

To be sure, many of the newly created jobs are lower-paying than ones that were lost. Plus, many discouraged job seekers are no longer being counted among the unemployed after giving up looking for work.

Nevertheless, job opportunities are popping up more frequently than any time in the past four years.

Ask James McMillion of Tampa, one of 400 people hired this week at a job fair hosted by the expanding Seminole Hard Rock Hotel & Casino.

"I think (the job market) is rising a little bit," said McMillion, who has an offer as a prep cook at the Hard Rock pending results of a standard background check. The problem, he said, is the pickup in hiring hasn't been enough to make a dent in the sluggish economy yet.

In a statement Friday, Florida Gov. Rick Scott called March's unemployment drop "a milestone all Floridians can celebrate."

The gains may look better than reality, however, because Florida's labor force continues to shrink even as the state's population rises.

About 15,000 Floridians age 16 and up dropped out of the labor pool last month. Economists believe many are discouraged job seekers who have just temporarily given up looking. When they return to the job hunt, unemployment is likely to rise again.

That prompted Scott Brown, chief economist with Raymond James Financial in St. Petersburg, to take the latest jobs report in stride. Yes, it's becoming easier for small businesses to get bank loans again, he said. Yes, the worst of the housing market has abated.

"But the big drop in the unemployment rate is because people left the labor force as their unemployment benefits expired," he said.

Labor force participation — the number of noninstitutionalized, working-age Floridians who have a job or want one — is at the lowest level since 1986.

It's not a Florida-only phenomenon. Like Florida, the labor force participation nationally has fallen about a half-percentage point over the year.

Brown said the participation rate will likely not return to historically high levels, particularly given aging baby boomers who are retiring.

"But some retirees will come back if the economy is doing well and they can find good jobs at good pay," he said. "We're still way below potential."

Among other insights from Friday's jobs report:

The Tampa Bay region, which was the No. 1 job creator in February, slipped to second-biggest gainer this month behind Miami-Miami Beach.

The bay area's unemployment rate fell to 8.9 percent (down from 9.4 percent) with job creation in urban Hillsborough and Pinellas counties leading the way. Hillsborough's jobless rate is now the lowest in the area at 8.5 percent while Pinellas is at 8.6.

The job market is improving in outlying counties as well, but they have much further to go. Unemployment in both Pasco and Citrus stands at 10.1 percent. Hernando is at 11.3 percent, second-highest statewide.

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