Florida's unemployment rate is still dropping at a surprisingly strong clip. Unfortunately, what's also falling is the number of Floridians who either have a job or are looking for work.
The unemployment rate fell from 9 percent in March to 8.7 percent in April, dipping to the lowest point in more than three years, but the state lost 2,700 jobs.
It's not unusual to have a disconnect between the unemployment rate, which is taken from a household survey, and the jobs numbers, which are based on feedback from employers.
Still, it underscores a recurring theme of this sluggish economic recovery: The plummeting unemployment rate looks better than reality because more people have dropped out of the labor force.
"The state of the labor market is not as good … as the press release (on unemployment) might suggest," said University of Central Florida economist Sean Snaith. "You couple the unemployment rate with payrolls falling and a shrinking labor force, and you get a more complete picture of a broken market still struggling to get on its feet."
Last month, Florida's labor pool — the number of people either working or looking for a job — dwindled by 28,000. Some of those exiting the labor market are retirees or others who have left the state in search of better prospects elsewhere.
One study by Moody's Analytics found that 60 percent of the 6.7 million who dropped out of the labor force across the country in April were employed at the time, an indication that a majority of dropouts could be retiring baby boomers.
Still, given that Florida's population continues to grow, economists believe a sizable number of the state's dropouts are workers who have temporarily given up their job hunt. Once they start looking for work again, the unemployment rate could rise.
State economists estimate Florida's unemployment rate would be higher than 16 percent if you add in discouraged job seekers and part-timers who would prefer to have full-time work.
Ironically, Snaith said, the healthiest sign of recovery may be the moment when unemployment starts to head up if it means discouraged workers are more confident that jobs are back.
Florida's dwindling unemployment rate has been good for the state's finances as well as its psyche. It means the state no longer has to pay extended federal unemployment compensation benefits. The extended benefits — which once provided up to 20 additional weeks of compensation for job seekers — were cut off on May 12.
"The unemployed have a tendency to give up looking once their unemployment insurance benefits expire," which would shrink the labor force even more, said Scott Brown, chief economist with Raymond James Financial in St. Petersburg.
In a statement, Gov. Rick Scott focused on the latest jobless rate — which has closed the gap with the national rate of 8.1 percent — rather than jobs lost.
"This continued drop in Florida's unemployment rate is proving our economy is on the path to recovery and Floridians are getting back to work," Scott said. "With Florida being ranked as one of the top two states for business in the nation, employers are sure to continue expanding and moving to Florida, creating jobs that help us ensure this pattern will continue."
Tampa Bay's unemployment rate also fell substantially, from 8.9 percent to 8.5 percent. Like the statewide snapshot, Tampa Bay's rate dropped largely because its labor pool got smaller, down more than 13,000 people. The metro area lost 600 jobs between March and April.
Tampa Bay had been Florida's top job-creating metro year over year; the past two months it's been second behind Miami-Miami Beach.
Among area counties, Hernando remains hardest-hit with a jobless rate of 10.8 percent; Hillsborough and Pinellas counties were at 8.2 percent, the lowest in the region.
Statewide, professional and business services led the way, up a net 7,800 jobs from March to April. Construction remained the biggest drag. The state lost 9,200 construction jobs over the month, far more than any other industry. Over the year, Florida's already depressed construction sector shed 24,500 more jobs, more than any other state.
The second-biggest job loser last month was leisure and hospitality, down 4,800 jobs. Rebecca Rust, chief economist with the state Department of Economic Opportunity, attributed part of the job loss to Easter falling sooner in the calendar this year, leading to earlier, seasonal layoffs.
The overall drop in jobs in April, Rust said, was minimal.
"It's still a slow, modest recovery," she said, "and housing is holding it back from being stronger than it would otherwise be."
Jeff Harrington can be reached at [email protected] or (727) 893-8242.