Steady job growth and a strong real estate market make South Florida’s economic outlook brighter than the rest of the U.S. Southeast, according to the chief of the Federal Reserve Bank of Atlanta.
“On the measure of development of commercial real estate and investment in residential real estate, as well as the employment picture, I think Miami is a little better off than most of the Southeast,” Dennis Lockhart said Wednesday at a Greater Miami Chamber of Commerce event.
As a whole, he said, the region is tracking the national economy but lagging behind in employment numbers in some areas. Not so in Florida, where the latest state unemployment rate was 6.2 percent, better than the national rate of 6.7 percent.
Beyond the official unemployment rate reported by the federal government, Lockhart said he and his Atlanta-based forecasters look at a broader labor pool. Their tally includes so-called marginally attached workers who want jobs but are not actively looking as well as part-time workers who would like to move up to full-time employment. The unemployment rate when you factor in those groups is 12.6 percent, he said.
“The good news is that, over the past six months, the difference between these two measures of unemployment has in fact been narrowing,” Lockhart said.
Also, unlike the rest of the Southeast, he added that Miami’s “unique attributes” as an international city have helped accelerate the economy through foreign investment in high-priced real estate.
Lockhart, who has served as president and CEO of the Atlanta Fed since 2007, addressed about 300 chamber members and guests at the group’s monthly trustee luncheon at Jungle Island.
He noted that harsh winter weather across most of the country caused a hiccup in economic recovery in the first three months of the year — though not in Florida, which may have benefitted from frigid temperatures elsewhere.
The national economy will bounce back in the second quarter and beyond, Lockhart projected, acknowledging that his opinions were his own and that “my colleagues in the Federal Reserve system may not agree.”
Calling the first quarter “a one-off spell of weaker performance,” Lockhart said national economic growth will pick back up, unemployment will shrink, and interest rates are not likely to rise until the end of 2015.
“My key working assumption is that growth will accelerate in the second quarter and repeat in subsequent quarters,” he said. “I expect stronger growth will help to absorb underutilized resources in the economy, especially labor resources.”