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Florida unemployment rises to 11.7% in August

Never mind the "summer of recovery." Florida isn't even poised for an autumn of recovery.

Florida unemployment climbed to 11.7 percent in August, scorched by the combined impact of thousands of additional lost jobs and an influx of longtime jobless who got off the sidelines and began actively looking for work again.

The jump, up from 11.5 percent in July, came as Florida shed 16,000 jobs between July and August, about half of that from eliminating part-time U.S. census jobs.

Tampa Bay remains among the state's hardest-hit regions, with unemployment rising to 12.6 percent. Over the year, the bay area has lost 4,300 jobs, second among Florida metros to Miami-Fort Lauderdale.

A rise in unemployment was widely expected given the anticipated loss of census takers. But the jobs report released Friday underscores why Florida — and the bay area in particular — is having a rougher time pulling out of the Great Recession than most of the country. Among the reasons:

Strapped consumers: What comes first: confident consumers spending more or a pickup in business hiring? Rebecca Rust, chief economist with the Florida Agency for Workforce Innovation, said the country usually relies first on improved household spending to recover from a downturn.

That puts Florida at a disadvantage. It has a lower median household income than the national median. And based on a census report out this week, Florida's poverty rate rose from slightly lower than the national average to slightly higher, adding more than 300,000 Floridians to the ranks of the working poor in 2009.

Florida currently has the second highest rate of foreclosures in the country, a phenomenon that continues to push down home prices. Because of the severe drop in Florida home values, fewer homeowners can refinance their mortgages to free up money for spending and paying down other debt.

Without higher consumer spending, Rust said, businesses are reluctant to add jobs. Without more jobs, consumer spending remains depressed. "The two trends are reinforcing each other," she said.

The construction bust: Florida is still battling a severe depression in its construction work force. The number of construction jobs has been cut in half the past five years, with the state shedding another 17,800 construction jobs year over year and 200 jobs just last month.

Scott Brown, chief economist with Raymond James Financial in St. Petersburg, suggests that's one reason that Tampa Bay isn't among a half-dozen Florida metros that have added jobs over the year.

"Areas that had the worst housing bubbles are having the worst hangovers, and that includes Tampa," he said.

Dependence on small business: Florida's economy is driven largely by smaller companies and has relatively few major corporations considering it is the fourth-largest state.

That's a recipe for sluggish recovery, Brown said, because of a sharp contrast in financial strength among businesses of different sizes. Many large corporations are reporting higher profits and are able to borrow to expand. In contrast, he said, "the small firms appear to really be going nowhere" with credit still tight and uncertainty over tax policies restricting their hiring.

Those factors combine to widen the gap between Florida and much of the country. The state's jobless rate is now more than 2 percentage points higher than the national average of 9.6 percent. Florida has about 1.1 million jobless out of a work force of 9.3 million.

On the positive side, Florida work force officials noted the state is up 29,800 jobs compared with year-ago levels, and Florida tax collections have increased for five consecutive months. Moreover, eight of the state's 20 metro areas have added jobs year over year. Education and health services no longer bear the entire brunt of job creation; a total of five industries, including professional and business services and trade/transportation, have gained jobs since August 2009.

"Historically, mixed signals from economic indicators during the bottom of a recession are common until the economy recovers," said Cynthia Lorenzo, director of the Florida Agency for Workforce Innovation.

University of Central Florida economist Sean Snaith offered a less upbeat appraisal, describing Florida's labor market as pitiful.

"It's a tepid recovery combined with so much uncertainty — short bursts of 'good' news combined with a long-term outlook that's still unclear," said Snaith, director of UCF's Institute for Economic Competitiveness.

Florida's unemployment rate peaked in March at a modern-era record of 12.3 percent before falling as low as 11.4 percent in June.

Jeff Harrington can be reached at jharrington@sptimes.com or (727) 893-8242.

County-by-county jobless rates

RegionAugust 2010July 2010August 2009
Citrus14 percent13.7 percent12.8 percent
Hernando15 percent14.4 percent13.7 percent
Hillsborough12.4 percent12.3 percent11.3 percent
Pasco13.3 percent12. 9 percent12.4 percent
Pinellas12.1 percent11.8 percent11.3 percent
Hendry

(highest)
20.6 percent19.9 percent18.1 percent
Liberty

(lowest)
7.5 percent7.5 percent6.2 percent
Tampa Bay*12.6 percent12.3 percent11.6 percent
Florida11.7 percent11.5 percent11 percent
Nation9.6 percent9.5 percent9.7 percent

*Combines Hernando, Hillsborough, Pasco and Pinellas counties

Note: County and Tampa Bay area numbers are not seasonally adjusted. Florida and U.S. numbers are seasonally adjusted.

Source: Florida Agency for Workforce Innovation

Florida unemployment rises to 11.7% in August 09/17/10 [Last modified: Friday, September 17, 2010 10:54pm]
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