Thursday, June 21, 2018
Business

Florida unemployment rate falls to 7.1 percent in May

Florida's economic recovery is back in Jekyll-and-Hyde territory.

A remarkable three-year drop in Florida's unemployment rate continued in May with a slight drop to 7.1 percent. That marks the 33rd straight month Florida unemployment has either dropped or remained unchanged, pushing it down to the lowest level of joblessness since September 2008.

Another key indicator, however, shows a darker side to the recovery: The state lost 6,200 jobs between April and May, the first time in a year that it failed to add jobs. A pullback in construction and cut in government jobs overwhelmed gains made in professional and business services, among other industries.

It was the third largest over-the-month loss of jobs in the country behind only Pennsylvania (down 9,200 jobs) and South Carolina (down 7,700 jobs).

Despite the setback, the state remains up 122,500 jobs, or 1.7 percent, compared to year-ago levels.

University of Central Florida economist Sean Snaith said he wouldn't be surprised to see six more months of mixed, muddy and sluggish results like Friday's report from the Florida Department of Economic Opportunity.

"I think it's really a function of the national economic environment with the recovery slowing and the sequester" causing federal budget cuts, he said.

Toss in fears that the health care overhaul could make it more expensive to hire workers, and "more and more businesses are going to be hesitant to go into the labor market pool," Snaith said.

It's not unusual for the government to report a disconnect between the unemployment rate and job creation numbers since they're drawn from two different monthly surveys. A household survey is used for calculating the unemployment rate, while employers are quizzed about payrolls to come up with the number of jobs added or lost every month.

There was no such disconnect in Tampa Bay: Both numbers went the wrong direction. Unemployment rose from 6.7 percent to 6.9 percent, while the region lost 300 jobs, virtually flat in a workforce of 1.2 million.

Tampa Bay continues to lead all Florida metros over the longer haul of the recovery, gaining 33,800 jobs since May 2012.

In a YouTube video heralding the release of the jobs report, Gov. Rick Scott spoke solely about the state's unemployment rate, ignoring the drop in jobs. Florida is now a full half-percentage lower than the national rate of 7.6 percent after being a laggard throughout the recession.

"Each month, we continue to distance ourselves from the national unemployment rate, and it is clear we are succeeding in growing opportunities for Florida families to pursue the American Dream," Scott said in a statement. "Once again, Florida's unemployment rate is well below the national average."

The jobless rate would need to fall below 6 percent to approach a range consistent with a healthy economy. Nevertheless, the current range is vastly improved from Florida's 29-month streak of double-digit unemployment during the worst of the Great Recession.

Economists have repeatedly expressed doubts whether the drop in unemployment so far has overstated the economic recovery both nationally and in Florida.

The raw number doesn't reflect discouraged workers who have temporarily given up looking for work, so they aren't counted among the searching jobless.

In Florida, the working-age population of non-institutionalized residents has grown by 214,000 over the year but the labor force, which includes those with a job and those who are looking, has grown only a fourth of that. Some of the new Floridians are retirees and others who will never again look for work, but it includes discouraged workers.

The raw unemployment rate also doesn't reflect part-timers unable to find full-time work or underemployed workers who, in better times, would be in higher-paying jobs matching their educational backgrounds.

"You still have a lot of kids not getting jobs; a lot of kids with college degrees working fast food," said Scott Brown, chief economist with Raymond James Financial in St. Petersburg.

Among other signs of a still-challenging economy: retail sales have turned soft, manufacturing has been sputtering and rising interest rates threaten to derail or at least dampen what has been an encouraging housing recovery, Brown added.

"We're still a long, long way to go until full recovery, but the good news is we're still moving in the right direction."

Jeff Harrington can be reached at [email protected] or (727) 893-8242.

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