Florida’s unemployment rate hits 3 percent, lowest on record

The state’s unemployment rate dropped into record territory in December. For the first time since current records began in 1976, the rate hit 3 percent.

The state added 16,000 jobs, according to the monthly report from the Florida Department of Economic Opportunity, a solid total given the record length of the current economic expansion. The civilian workforce grew slightly to 10.5 million; 311,000 people were unemployed.

Here are three takeaways from Florida’s jobs picture:

1. Could Florida see unemployment in the 2 percent range? No other large state has entered that territory during this economic cycle, though several smaller states including Vermont and Utah have dropped into the mid 2 percent range. Florida’s unemployment rate dropped or remained the same every month since February of last year, so there’s certainly a decent chance that the rate falls below 3 percent for the first time ever.

Either way, the state will likely set another record. The unemployment rate has remained under 4 percent since January 2017. The 24-month run is the second-longest in the state’s history. Given current economic conditions, it appears certain Florida will top its 27-month streak set before the Great Recession took hold in 2007.

2. The job prosperity was widespread. Nearly every major job sector in the state added jobs since December of the previous year, with education and health services leading the way, up by 54,100. Leisure and hospitality added 47,900, professional and business services, 35,500; construction, 25,500; trade, transportation, and utilities, 17,800; government, 13,800; other services, 8,400; financial activities, 7,800; and manufacturing, 6,200. Only the information sector shed jobs, losing 5,000.

Plus, 23 of the state’s 24 metro areas also posted gains from a year earlier. The Orlando area added the most, 43,300, followed by Tampa-St. Petersburg-Clearwater at 31,000 and the Miami area at 25,900 jobs. Panama City posted a loss of 300 jobs from a year earlier.

3. Wages remain a bit of a mystery. Wage data for December wasn’t included in the report the state released Friday. In November, the average hourly wage was $26.05, up about 4 percent from a year earlier, not adjusted for inflation. Since November 2009, the hourly wage rose $4.29 or nearly 20 percent, about the same level as inflation over the 10 years.

Why haven’t wages risen faster given such low unemployment? It stands to reason that with such a tight labor market, businesses would have to pay more to attract and retain workers. But that hasn’t been the case, at least to the extent many economists would have predicted. One likely factor, though there’s a debate about how much it matters: More people are rejoining the workforce.

You can see the trend in the state’s labor force participation rate. In Florida, 59.5 percent of working-age residents were employed or looking for work, up from a recent low of 58.8 percent in 2015. (The rest are retired, in college, disabled or otherwise not working.)

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That may not sound like a big difference, but in a state with a civilian workforce that tops 10 million, even a slight uptick in the participation rate can mean tens of thousands of more people working. Everything else remaining the same, a 1 percentage point increase in Florida’s participation rate would add about 165,000 workers to the current labor force. That’s a lot more people that businesses can rely on to fill open positions.

Fast facts from the jobs report:

The unemployment rate in the Tampa Bay area hit 2.6 percent, down from 2.7 percent in November.

As for Florida’s 67 counties, Monroe (the Florida Keys) and Miami-Dade tied for the lowest unemployment rate at 1.8 percent. Largely agricultural Hendry County had the highest at 4.6 percent.

The unemployment rate in our local counties:

Hillsborough, 2.5 percent

Pinellas, 2.5 percent

Pasco, 3 percent

Hernando, 3.6 percent

Citrus, 4 percent

Sarasota, 2.6 percent

Manatee, 2.6 percent