Friday, May 25, 2018
Business

Florida's jobs market weakens in January after 2013 turns out better than thought

Florida did a much better job of creating jobs last year than previously reported, but couldn't keep that momentum going into 2014.

The state added nearly 200,000 jobs last year, or about 35,600 more than it had estimated, according to revised figures released Monday. That's a 2.6 percent increase year-over-year, the fastest pace since the end of the recession in 2009.

January was another story.

Florida lost 2,600 jobs that month, led by a shrunken workforce in retail, hotels, restaurants, health care and government. Other than professional and business services, most industries were either flat or down.

The reversal came even as the state's unemployment rate continued to fall, dropping from 6.3 percent in December to 6.1 percent in January. The unemployment rate and the number of jobs created don't always move in lockstep, in part because they're drawn from two different surveys.

Scott Brown, chief economist with Raymond James Financial in St. Petersburg, said January's slippage shows just how far Florida has to go to reach full recovery.

"It's not a pretty picture," Brown said. "You do have to take the numbers with a grain of salt, but in general they're a little disappointing for the start of the year."

Economist Sean Snaith of the University of Central Florida agreed January was a setback but maintained that the upward jobs revision for 2013 was more important.

"We added an average of 3,000 more jobs a month in 2013 than we thought we had," he said. "By and large, I'd say it's a favorable report. It may be a harbinger of even better times ahead for Florida's labor market."

January was a rough month for Tampa Bay in particular. The area lost 14,100 jobs and its unemployment rate rocketed back up to 6.5 percent from an adjusted 6 percent in December. The region, which had been a statewide leader in job creation, has slipped to third biggest job-creator year-over-year behind Orlando and Miami. Compared to a year ago, the bay area is still up 29,400 jobs.

Unlike state data, metro area figures are less reliable as a gauge of economic health because they are not adjusted for seasonal hiring in industries like tourism and agriculture. As a result they tend to fluctuate more month to month.

Like Florida, the national jobless rate fell in January from 6.7 percent to 6.6 percent — and then ticked back up to 6.7 percent in February. (Florida releases its February data March 28.)

However, economists have repeatedly said the huge monthly drops in unemployment both nationally and statewide are likely overstated because of a simultaneous decline in labor force participation. People who are discouraged and at least temporarily give up their job search are no longer part of the labor pool and, therefore, not counted in the unemployment rate.

One sign of concern: Florida's 16-and-up population grew by 170,000 since January 2013, but its labor force only grew by 29,000 over the same period. Retirees account for a significant part of the labor pool slack, but not all of it.

Ironically, if job growth picks up as some economists expect, it may drive more discouraged workers back into the labor pool to compete for jobs. That could make the unemployment rate rise again, but it would still be a favorable sign of "a deepening labor market recovery," Snaith said.

Gov. Rick Scott, who was in Orlando on Monday morning, announced the new jobless rate through a brief YouTube video. In the clip, he touted that unemployment had fallen to its lowest level since June 2008. But Scott made no mention of last month's retraction in jobs.

In a separate news release, Scott's office focused on long-term positives:

• Since December 2010, Florida has created 503,500 private sector jobs.

• Over the same three-year stretch, unemployment has fallen 5 percentage points.

• The annual "benchmarking" revision to adjust the data and tie it to tax records showed the state added 40,700 more private sector jobs over three years on top of the original estimate of 462,100 jobs.

"We have come a long way in three years, but let's keep working to make sure every person who wants a job can have one," Scott said in a statement.

Mekael Teshome, an economist with PNC Financial Services Group, said he doesn't think the weaker-than-expected January report will sidetrack Florida. He still predicts the state will see balanced growth in 2014 and continue to outperform the rest of the country.

The lower labor force participation is a risk, Teshome said, "but I don't see the economy itself being at risk. The major aspects of the economy are improving … 2014, I think, should be better than 2013."

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

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