Economy

Economists: Florida jobless rate to remain bleak

 

Trouble in the housing market and uncertainty in Europe could keep Florida’s jobless rate high through 2016, a group of state economists said Monday.

Herald/Times Tallahassee Bureau

Florida’s unemployment rate probably won’t change much between now and the end of the year, and the jobs picture is set to remain bleak through 2016, a team of state economists said Monday.

With a troubled real estate market and trouble brewing in Europe, the state economy faces a prolonged uphill climb, according to the Economic Estimating Conference, a group of state labor experts.

The group’s long-term predictions about the economy have potential repercussions for the both the presidential election in November and the 2014 race for governor.

As President Barack Obama and Republican presidential hopeful Mitt Romney vie for Florida’s 29 electoral votes, they will likely be doing so at a time when the state’s employment numbers remain stagnant. When Gov. Rick Scott runs for reelection in 2014, Florida will likely be suffering from high joblessness, with a rate near 8 percent.

Even if job creation accelerates in the coming months, that might not translate into declining unemployment right away, since the current rate has been skewed by large numbers of people leaving the labor market in recent months, the economists said.

“At some point, when the economy starts getting better, you’re going to see those folks coming back into the labor force, and begin actively looking for a job again,” said Amy Baker, head of the state Legislature’s Office of Economic and Demographic Research. “You could see that put a little upward pressure at least to flatten out, a little bit, the unemployment rate.”

Here are a few highlights from the Economic Estimating Conference:

• Unemployment is expected to remain at or near its current rate of 8.6 percent throughout the rest of the year.

• Florida’s unemployment rate will probably not fall below 7 percent until 2016, and will be higher than the national unemployment rate until 2018.

• Impending foreclosures and a tight credit market will likely be a drag on the housing market for several years.

• Tourism will likely take a hit from the economic problems in Europe and the slowdown in China’s growth rate.

There was some good news as well. Car sales have come in higher than expected so far this year, and the trend lines continue to point upwards.

“The auto industry is doing well,” said Clyde Diao, an economist with the governor’s office. “Gas prices have gone down, so probably people are more inclined to buying new SUVs and trucks.”

The construction industry — a national leader in job losses for several months running — will likely begin adding jobs again in the next few weeks.

Also, Florida has collected about $400 million in revenue above estimates so far this year, welcome news for a Legislature that has had to wrangle over a tight budget since the beginning of the recession.

But as financial problems once again mount in Europe, Florida could feel the ripple effects in its tourism industry and housing market.

And real estate, one of the state’s main economic drivers, is forecast to remain troubled for several years to come. Because it takes more than two years for the average foreclosure to run its course in Florida, the recent uptick in foreclosures is likely to affect prices through 2014.

“What I think about a lot is the inventory we have out there and foreclosures hitting the market over the next two years,” said Baker. “I think that’s going to tend to depress prices.”

Toluse Olorunnipa can be reached at tolorunnipa@MiamiHerald.com and on Twitter @ToluseO

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