Wells Fargo Securities Economics Group: Florida’s Economic Recovery Continues To Build Momentum
Florida's unemployment rate fell 0.1 percentage points in January to 7.8 percent, bringing Florida's jobless rate slightly under the U.S. rate for the first time in five years. The improvement was driven by strong employment growth combined with modest growth in the labor force. The number of Floridians working increased 2.5 percent over the past year, while the number either working or actively looking for work, the civilian labor force, increased by just 1.0 percent.
Private employment rose 2.3 percent year-over-year, which is slightly better than the 1.8 percent overall rise. Job gains have been broad based with the exception of information and government. The information sector has lagged recently due to cutbacks in traditional publishing that have offset gains in the tech sector. Government has also faced declines due to tighter federal, state and local budgets. Service-providing sectors posted the strongest gains, led by growth in Florida’s key leisure and hospitality sector. Construction employment also increased, rising 3.2 percent, likely driven by recent improvement in the home building and commercial construction. Over the past year, Florida has added 134,600 jobs and the unemployment rate has fallen 1.4 percentage points, the largest decline in the nation.
Nearly Every Major Employment Sector Improved in Revisions
Florida’s labor market is better positioned than previously thought. The revised data show Florida added over 250,000 jobs since March 2011, or 86,000 more jobs than initially reported. With the exception of the information sector, all employment categories were revised up. Trade, transportation and warehousing, leisure and hospitality and construction all saw double-digit improvements, helping to raise annual nonfarm payroll growth nearly one full percentage point to 1.8 percent. The upward revision is not entirely surprising considering that the household survey and Quarterly Census of Employment and Wages were both tracking larger annual gains than the initial 2012 nonfarm employment figures. Although recent data is encouraging, employment remains 7.4 percentage points below its prerecession peak, which is equivalent to a gap of nearly 600,000 jobs. The upward revisions are welcomed news, but at the current pace, it would take over four years to get back to the 2007 peak.
South Florida’s labor market has been a bit more volatile. Previous employment figures showed a marked deceleration and were much lower than the recently revised numbers. Some deceleration is still evident even after the revisions. Much of the slowdown has been in Dade County, where job growth is now up just 1.1 percent year-to-year. Employment growth has also moderated in West Palm Beach and Fort Lauderdale, which are up 2.1 percent and 2.0 percent, respectively. The geographic center of job growth appears to have shifted to the center of the state, with Tampa and Orlando adding 31,200 new jobs and 20,200 jobs over the past year, respectively.
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