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Florida's unemployment steady but labor force increases by 7,000 in December

For proof that numbers can be deceptive, look no further than December's unemployment report.

Florida's jobless rate remained unchanged at a staggering 12 percent — just shy of a modern-era record — while the national rate fell from 9.8 percent to 9.4 percent.

In reality, the national unemployment picture was worse than it appeared, while Florida actually chalked out a gain in one key area: Its labor force is growing again.

True, the country added 103,000 jobs over the month, but the reason the national unemployment rate fell so significantly is because about 260,000 people dropped out of the labor force. Economists believe some, if not most, of them are discouraged job seekers who will re-enter the job hunt at some point, likely driving unemployment back up. Some predict the bounceback as soon as January's numbers are released.

On the other hand, Florida's labor force grew slightly in December, up 7,000 for the month and up 33,000 from December 2009. Though a miniscule increase in a sea of 1.1 million unemployed Floridians, it's at least going in the right direction.

Scott Brown, chief economist for Raymond James Financial in St. Petersburg, said he was encouraged and "kind of surprised" the labor force would increase that much.

He figured Florida would face the same situation as most of the country: A temporary lapse in extended unemployment benefits would cause the labor pool to shrink. The reasoning: To receive benefits, you have to be looking for a job — the same criteria to be counted among the unemployed. So during a lapse in benefits while Congress debated an extension, some workers would lose the incentive to keep looking and no longer be counted as unemployed.

Brown advised not reading too much into data about Florida's growing labor force until a trend develops over several months. But it could indicate increased confidence that jobs are available.

"That's normally what you'll see as an economy begins to improve," he said. "Spouses start coming back into the work force. You may get retirees coming back looking for jobs."

Rebecca Rust, chief economist with the Florida Agency for Workforce Innovation, which tracks unemployment issues, said the labor force number could be indicating people are more receptive to positive signs on the employment front. Among the positives she cites:

• Health care is no longer the only Florida industry growing jobs. Hotels and motels, general merchandise stores and membership associations are among the groups adding jobs.

• After three years of losing jobs, Florida has had a positive job growth rate for six months in a row.

• Mass-layoff notices are down and job postings are up, with about 200,000 online job postings last month.

In the Tampa Bay area, the labor force shrunk by fewer than 2,500 over the month while the region added nearly 6,300 jobs. Put those two statistics together and Tampa Bay wound up with a sizable drop in unemployment: from 12.7 percent to 12 percent.

Similar one-month drops in the months ahead appear unlikely, as few expect Florida's climb out of the Great Recession will happen quickly. The consensus of a statewide group of economists is that unemployment will fall no lower than 11 percent by the end of 2011 and not reach a more comfortable level of 6 percent until fiscal 2019.

So even though some companies are hiring, it's not enough to move the employment needle very far or very fast.

"It's a little bit of a chicken-and-egg issue: Firms don't want to hire people until they see strong (consumer) demand, and they're not going to see strong demand until the job market picks up," Brown said.

"This isn't a typical recession. It was a major financial crisis and it takes a long time to work through all the damage done."

Jeff Harrington can be reached at Follow him on Twitter at jeffmharrington.

Florida's unemployment steady but labor force increases by 7,000 in December 01/22/11 [Last modified: Saturday, January 22, 2011 3:31am]
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