Advertisement
  1. News
  2. /
  3. Business

Chances of a Florida recession are on the rise, chamber economist says

In April, Florida had roughly a 21 percent chance of slipping into a recession in the next nine months, according to the chief economist for the Florida Chamber Foundation. Now that’s grown to 34 percent.
Jerry Parrish, chief economist of the Florida Chamber Foundation (Courtesy of Florida Chamber of Commerce) [SUSAN TAYLOR MARTIN | Jerry Parrish]
Published Aug. 21
Updated Aug. 21

The probability that Florida’s $1 trillion economy will lapse into recession has risen substantially since the spring, the chief economist for the Florida Chamber Foundation said Wednesday.

In April, foundation economist Jerry Parrish put the chances of a Florida recession within nine months at a little under 21 percent.

Now he sees a 34.2 percent probability.

“There are several things going on,” Parrish said in an economic update posted online by the foundation, the research arm of the Florida Chamber of Commerce.

At the top of his list was an ominous warning from the bond market.

Last week, the yields, or returns, on 10-year U.S. Treasury bonds briefly fell below those for 2-year Treasury bonds. This is the opposite of what you would typically expect. Normally, the government has to offer investors higher interest rates on its long-term bonds. But as global investors get anxious, more move to long-term investments in a search for safety. That led the U.S. government last week to offer a higher rate for its 2-year bonds than for its 10-year bonds.

This is called an inverted yield curve, and it has preceded every recession since 1955.

The inversion “doesn’t mean we’re destined to have a recession," Parrish said, "but the reduction in business investment that’s happening, along with the global slowdown, do increase the odds of it happening.”

Parrish is not alone in seeing signs that Florida’s economy is slowing. Last week, state economists predicted that Tallahassee should count on $452 million less in revenue to the state this year than was previously anticipated. A big chunk of this was not about the economy. Instead, the Seminole Tribe of Florida decided to stop sharing casino revenues with the state after lawmakers and Gov. Ron DeSantis couldn’t reach a new gambling agreement.

But aside from that, economists did warn of a slowdown that could put a dent in the collection of sales, corporate and other taxes that fuel Florida’s $91 billion state budget.

“In my mind, I think of it as winded,” said Amy Baker, head of the Legislature’s Office of Economic and Demographic Research. “If you’re on a marathon, and you’ve been on it for a very long time, those last few miles, you’re starting to get winded. I think that’s where we think the economy is. It’s moving into a slowing of growth.”

Despite the increased risk of recession, Parrish finds indicators that are still pointing in the right direction.

“The job numbers are going up — 227,200 jobs created over the past year — and the unemployment rate (of 3.3 percent) is also improving,” he said. Florida is growing by about 900 net new residents a day, and nearly a million dollars of adjusted gross income moves into the state every hour. The state’s 124.6 million tourists last year paid more than $12 billion in state and local taxes. “You could say that they’re the reason Florida doesn’t have an income tax.”

Contact Richard Danielson at rdanielson@tampabay.com or (813) 226-3403. Follow @Danielson_Times






ALSO IN THIS SECTION

  1. The main exhibit center at the Museum of Science & Industry in Tampa once stirred the imagination with dinosaurs and stars. Now, it's empty, but on the verge of rebirth as a movie studio.
    The County Commission has set aside $2 million for the project as the Film Commission studies the demand for it.
  2. Snack-focused delivery app GoPuff launched in Tampa in February. It serves the area surrounding the University of South Florida. GoPuff
    Flamin’ Hot Cheetos or Funyuns? GoPuff says it has the data for which snack Floridians love the most.
  3. "House Hunters," shot at a home in the Bayshore Beautiful area.  (Times | 2007) Tampa Tribune
    Whang, 57, was also a comedian and actress.
  4. The city is accepting applications for its Commercial Revitalization Program. The city has allocated $175,000 for the program this year.
  5. The Walmart supercenter at 990 Missouri Ave. faced fines in December for these storage containers in the parking lot. City officials are debating whether to make a short-term arrangement with the city two’s Largo stores this year so they can store their holiday inventory. City of Largo
    In the end, city commissioners say yes, with some reservations.
  6. More construction is on the way to St. Pete-Clearwater International Airport, thanks to $19.75 million in Federal Aviation Administration grants to rehabilitate the airport’s runway. (Times file photo)
    The work is expected to be complete by spring 2021.
  7. Job applicants seek information about temporary positions available with the 2020 Census, during a job fair in Miami on Wednesday designed for people fifty years or older. LYNNE SLADKY  |  AP
    The state added 22,500 jobs in August.
  8. Homeowner Cheryl Murdoch, 59, explains the workings of the Philips Smart Mirror in her bathroom. Murdoch and her husband live in the Epperson neighborhood in Wesley Chapel, home of the Crystal Lagoon, where some residents are piloting new health technologies inside their homes. SCOTT KEELER  |   Times
    In Pasco’s Crystal Lagoon community, AdventHealth and Metro Development Group are testing in-home technology aimed at keeping people away from the hospital.
  9. A company called Flock Safety is selling automatic license plate readers to neighborhood associations to cut down on crime, and Tampa neighborhood Paddock Oaks is one of their customers. Pictured is a Flock camera on Paddock Oaks Dr. | [Luis Santana | Times] LUIS SANTANA  |  Times
    Atlanta-based Flock Safety has provided 14 area communities with high-speed, high-definition cameras for surveillance.
  10. An American Airlines Boeing 737 Max 8 aircraft approaches Miami International Airport for landing in March. Bloomberg
    The 60-year-old veteran airline employee told investigators he was upset that union contract negotiations had stalled.
Advertisement
Advertisement
Advertisement