Florida’s economy regained ground over the summer as businesses reopened and rehired. But it has hardly returned to its robust pre-pandemic state.
With days to go before the national election, the economic fallout from business shutdowns aimed at halting the spread of COVID-19 remains a central focus of the national debate.
While the early months of the pandemic were characterized by widespread unemployment, plummeting tourism and spiking delinquencies on power bills and mortgages, late summer and early fall saw a smoothing out of those numbers.
The result is what economists are calling a “partial recovery.”
Retail spending made gains over the past few months, and as Florida enters another phase of reopening, more businesses are welcoming customers and unemployment is trending downward. People are venturing out again, some still cautiously as coronavirus cases rise in many states.
But while the severity is lessened, the economic problems haven’t fully abated. Unemployment applications are up seven-fold compared to pre-pandemic levels. Florida’s mortgage delinquency rate is up almost five percentage points higher than it was during the same time in 2019. And Tampa International Airport passenger counts are half of what is typical this time of year.
Here’s where the state and Tampa Bay stand on key economic indicators:
Florida’s unemployment rate has fallen steadily since its peak in May at 14.5 percent when the state began opening up after a month-long lockdown. But the rate is still significantly higher than pre-pandemic levels, which trended downward for years before the pandemic. The still-high rate, experts say, is an indication that full recovery is still far off.
Part of the issue is that the pandemic’s effects have been spread unevenly among businesses. Leisure and hospitality and service sectors are taking the brunt of job losses and closures, while white-collar industries that are able to shift to a work-from-home environment, such as tech or finance, fared significantly better. That means the job losses continue to hurt the people who can least afford it: Those in lower income brackets have been far more likely to experience job loss and significant financial distress from the pandemic.
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After reaching historic highs in April, Florida’s first-time unemployment claims have trended down as state’s economy enters a partial recovery. Numbers ticked up slightly from the end of September to the beginning of October. The state had about 48,000 claims for the week ending October 10. Meanwhile, the number of claims nationally, hovering a little below 1 million filings weekly, remains staggering by historic comparison.
Florida’s state’s broken unemployment system was an early focus during the pandemic. Lawmakers received calls for help from about 60,000 Floridians who couldn’t get their unemployment applications processed though an online portal that frequently failed. In September, Gov. Ron DeSantis paused the state’s requirement that unemployment applicants need to show they have applied for at least five jobs per week. That requirement is set to resume Dec. 5.
Bankruptcies across the state fell again over the summer after ramping up during spring. In September, there were 3,019 bankruptcies — 14 percent lower than September 2019. They had previously plummeted in April after the federal government approved a relief package that included enhanced unemployment payouts.
In September, businesses announced the first rise in layoffs since the peak in June. The Worker Adjustment and Retraining Notification is a heads-up companies give to the state before making cuts. Businesses announced layoffs for 23,000 workers last month, nearly 60 percent of which came from Walt Disney Parks and Resorts, Universal City Development Partners and SeaWorld.
The housing market has continued to remain a bright spot in the state and national economy. Despite slowdowns in other areas, housing sales rebounded quickly from a springtime slump — and the local market has actually been so competitive with such low inventory, that buyers with government-backed loans have had trouble competing as multiple offers pour in on many listings.
Tampa Bay’s home sales were less breakneck in August, but surged past last year’s numbers in September, despite the fact that sales typically slow down toward the end of the year.
Extremely low inventory and the resulting competitiveness among buyers are causing home prices to rise quickly, economists have said. For the first time, the national median price rose above $300,000 in July. Florida’s median sales price hit that benchmark in August.
After foreclosures hit historic lows earlier this year, they began moving slightly upward after July, though they still remain far below their pre-pandemic numbers, according to ATTOM Data Solutions, a real estate data firm. One explanation for that small increase may be that at the end of July, Gov. Ron DeSantis narrowed the protections of the state’s eviction and foreclosure moratorium, giving the green light to courts to re-start foreclosures except for single-family homeowners who have been financially harmed by the pandemic.
Foreclosures in Florida are likely to see a more substantial increase starting this month, because DeSantis allowed the state moratorium to expire completely. A federal eviction moratorium issued by the Centers for Disease Control and Prevention still provides protections against evictions for renters. Other federal programs are in place to prevent foreclosures for many homeowners with federally backed mortgages. But those without federally backed mortgages are now left exposed.
These percentages represent the portion of total mortgages that are considered delinquent, including homeowners who have forbearance agreements with the lenders to delay payments. Therefore, many of the homeowners with delinquent mortgages may not be at immediate risk of foreclosure.
Still, the delinquency rate may more accurately capture the percentage of homeowners facing financial peril absent intervention. The dramatic spike in the rate in the spring broke the record for the single-greatest one month increase ever recorded (from March to April) by Black Knight, a national real estate research firm based in Jacksonville. And as this graph shows, delinquencies have still not substantially come down to pre-pandemic levels.
Tourism and Travel
Although the number of hotel stays and flights in and out of Tampa remain well below their pre-COVID rates, consumer spending is approaching what it was this time last year, though there is considerable lag time in reporting by the state. Florida collected about $2.5 billion in sales taxes through July, about 5 percent lower than what it collected in the same period in 2019. The amount is reported as August, but reflects the sales from the month prior. The biggest spike usually comes in the January report, which reflects the holiday spending from the month before. Sales tax revenue, which pays for many state government programs, plummeted by almost $1.8 billion over since April, but the latest collections beat estimates.
The number of passengers coming through Tampa International Airport and filling local hotels has plateaued after peaking slightly in July. The numbers of those going in and out of the airport hasn’t grown above 600,000 since the onset of the pandemic, when it normally tops out at nearly four times that number. Americans continue to be cautious around travel plans, many opting to drive when it’s an option.
But with the holiday season approaching and the Super Bowl in Tampa planned for the early part of the year, it’s possible both passenger and occupancy rates could climb this winter despite the pandemic. Tampa Bay’s average hotel occupancy rate climbed back to just below 50 percent and hovered at 47.3 percent for both August and September, according to travel analysts at STR, Inc. Even with the anticipated spike this winter, travel figures are still expected to remain well below what they reached over the same period last year.
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