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Editorial: The clouded story behind rosy economic numbers

 
Published July 1, 2016

A flood of recent reports paints a cloudy picture of the American economy, as consumers seem cautiously optimistic despite lingering worries over wages, housing, retirement, trade and seismic developments overseas. The outlook in Florida appears brighter, but the state's reliance on tourism and construction still exposes soft spots in the economic turnaround. This is all the more reason why Donald Trump and Hillary Clinton need to flesh out their very different economic agendas, and why voters need to make a forward-looking choice in this year's presidential campaign.

The Commerce Department last week revised upward its estimate of economic growth in the first quarter. While growth is still sluggish, it was welcome news and came amid signs the economy had regained some momentum, with retail sales and home prices rising this spring. Separately, the Conference Board reported that consumer confidence rose in June to the highest point since October, as Americans foresee a further stabilizing in the job market and in the broader economy over the next six months.

Florida continued to fare well, too, leading the nation in job growth, including 24,500 new jobs in May, nearly three times more than second-place Washington state. The state's unemployment rate dipped in May to an eight-year low of 4.7 percent, as the once-decimated construction industry rebounded and as low gas prices continue to fuel the state's tourism industry. The housing recovery has helped drive down foreclosures in some of the state's hardest-hit areas, as tight housing inventory and low interest rates underpin the rise in housing prices.

Still, these reports show an uneven recovery and stress on the middle class that is driving income inequality across the nation and in Florida. Florida's job performance, like in much of the country, comes as wages remain stagnant and as many discouraged workers have quit looking for jobs entirely. And Florida's fastest job growth is occurring in an industry that's historically paid low wages: the hotel and restaurant business.

New reports also show that the income gap is widening. A Pew Research Center analysis in May found that the middle class shrank in nine of every 10 metro areas between 2000 and 2014. Household incomes in most of the metro areas studied not only fell, but the widening wealth gap is moving more homes into either high or lower-income brackets. A separate study released in June put Florida fifth-highest among all states in income inequality, as the top 1 percent of wage earners make nearly 35 times more than the bottom 99 percent. Increases in housing prices have widened that gulf, as the owners of high-priced homes have enjoyed the biggest gains. The bottom line is that disparities are widening, adding economic pressures to the vast majority of workers and raising the appeal of populist candidates and causes.

Trump and Clinton have both tried to tap into voters' anxiety, but their criticism of free trade agreements ignores reality and misses the larger point. Closing America's borders will only cost American consumers, restrict access to the global workforce and raise a wall to U.S. exports. The candidates need to explain how they will rebuild the middle class, expand job training and educational opportunities and inspire investments in private-sector job growth. A new report by the Pew Charitable Trusts also shows that more than 40 percent of U.S. workers are entering their golden years without access to a pension or retirement savings plan. That insecurity, which Pew found especially concentrated in Florida, raises questions about the government's ability to provide aid programs to these incoming retirees.

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Britain's vote to withdraw from the European Union, which sparked a run on stocks that took $3 trillion from global markets, and the latest terror attack in Istanbul, Turkey, demonstrate the need for the next president to bring calm and certainty to the economic front. Anxiety and anger are not economic policies, and this nation and this coastal state cannot isolate themselves from the world. The candidates need to offer a clear way forward, and voters need to demand a serious discussion about the turbulent currents that continue to rock the nation's financial security.