The economy seems to be improving but there is a degree of uncertainty in the outlook for Northeast Florida, according to the latest quarterly newsletter from the University of North Florida’s Local Economic Indicators Project, or LEIP.
The LEIPLINE newsletter said the area’s economic data from April through July, the most recent data available, produced mixed results. That makes it difficult to forecast.
“We are less optimistic than three months ago, but also less confident in what we see,” the newsletter said.
“Both domestic and foreign concerns are making it difficult to determine if the recovery will continue along its weak path, accelerate due to improved political and economic conditions, or take us back to the first quarter and the inherent weakness that greeted the New Year,” it said.
That may sound like a downbeat forecast, but UNF economist Paul Mason, who heads LEIP, is a little more upbeat.
“I still think things are moving in the right direction,” he said.
The most recent labor market data for the Jacksonville area showed a spike in unemployment in July, after months of falling jobless rates. However, Mason said the increase in July was likely due to an unusually large pool of students entering the labor market in the summer.
LEIP is forecasting Northeast Florida’s unemployment rate to resume its downward trend in the coming months.
“With the early return to school for high school and college students this fall, we expect the August numbers to suggest less unemployment, with a return to the downward trend that has been going on pretty consistently since 2011,” the newsletter said.
LEIP is forecasting the unemployment rate to fall from a seasonally adjusted 6.17 percent in July to the low 5 percent range later this year.
LEIP’s overall index of leading economic indicators for the Jacksonville area has been up and down all year, with the index rising in three months and falling in four months.
“The LEI remains up for the year, but by less than one point,” the newsletter said.
“June was down and the preliminary estimates for July are not strong, though positive, but the LEI numbers recommend caution for the rest of the year,” it said.
LEIP’s consumer price index for the Jacksonville area shows that inflation has been moderate through the first seven months of the year.
“The annualized inflation rate is just over 1.25 percent, which is low relative to historical national inflation but quite normal for what the LEIP CPI has recommended over the last 12-plus years,” the newsletter said.
Local housing prices have risen “dramatically” nearly every month this year, according to LEIPLINE, but those increases have been offset by declines in other consumer spending categories.
“Every month it seems to be a different category that reveals declining prices. Used cars and trucks as well as six other categories declined in July, but in the second quarter price declines occurred in tuition and child care along with several categories of apparel, utility prices, and those on professional services. Medical care prices rose early in the quarter, then fell in June and July,” the newsletter said.
The national economy is continuing to show improvement, LEIPLINE said.
“While the strife in the Middle East and continued concerns about Russia and the Ukraine weigh on the financial markets, Main Street is proceeding towards expansion, albeit much too slowly for most people’s tastes,” it said.
The expansion of the Jacksonville area economy may also be going too slowly for some, according to LEIPLINE.
“It is frustrating, however, to realize that we are now five full years out from the end of the Great Recession, and yet not entranced in a rapid expansion,” it said.