A state report states that a recent drop in Florida’s civilian unemployment rate is actually a dropout of workers.
The Florida Legislature Office of Economic and Demographic Research reported in its June 21 “Florida: An Economic Overview” report that 69 percent, or more than two-thirds, of the decline in the unemployment rate from December to May was because of labor force dropouts.
It said the state’s unemployment rate dropped from 9.9 percent to 8.6 percent.
The drop would have been less if the percentage of the working-age population in the labor force, defined as people working or looking for work, had remained steady, it said.
“If the participation rate had held steady since 12/11 the unemployment rate would have been 9.5 percent,” the overview stated.
Further, it said “69 percent of the drop in the unemployment rate is due to people dropping out of the labor force.”
A chart shows that had the labor force participation rate held steady since January 2011, the state’s unemployment rate would have been 9.7 percent in May.
That implies the drop in the unemployment rate wasn’t because more people found jobs but because people dropped out of the labor force, meaning they quit working or looking for work.
The title of the page was “Labor force reductions account for most of rate drop.”
The overview, which is updated regularly, reports facts and research and does not make recommendations.
Among its other findings:
• Florida’s 8.6 percent unemployment rate in May translated into 794,000 people out of work, compared with a U.S. rate of 8.2 percent. Florida’s highest unemployment rate was 11.4 percent in January and February 2010.
• Eight states had a higher unemployment rate than Florida, which tied with Illinois and New York.
• Florida gained 53,800 jobs from May 2011-12, an increase of 0.7 percent, but it remained 751,800 jobs below its peak employment before the recession.
• Among Florida’s 67 counties, eight had a double-digit unemployment rate in May. At the peak, 52 were in double-digits.
• It would take the creation of about 1 million jobs for the same percentage of the total Florida population to be working as at the peak.
The overview also focused on housing, reporting the sales volume of existing homes and building permits are “both back in positive territory,” showing year-over-year growth. Total documentary tax stamp collections from documents that transfer interest in Florida real property, also are rising, although the 2010-11 collection total was just 28.5 percent of the peak year of 2004-05 and the 2011-12 total is on track to reach 29.5 percent.
It also reported:
• Existing homes sales are at 77.5 percent of their pace of the 2005 boom level, said the report.
• The median sales price reached $147,000 in May, the highest in 34 months but still 43 percent below the peak of $257,800 in 2006.
• Compared to the nation, Florida’s median price was almost 20 percent below the U.S. price in April, an improvement from almost 25 percent gap in August 2010 but still far below the almost 9 percent difference in October 2008.
• As of May, Florida had the second highest number of foreclosure filings in the nation and the sixth highest foreclosure rate. That was the same as during calendar year 2011.
• Looking more closely at sales, the percentage of real-estate owned and short sales dropped from April 2011 to March, while cash sales rose and financed sales inched up slightly.
• REO prices are 40 percent below and short-sale prices are 21 percent below average prices, so a drop in those sales lifts the drag in prices.
• Still, the “distressed” REO and short-sales accounted for the largest percentage of sales, at 45.3 percent, while cash sales represented 40.2 percent of sales and financed sales were 14.5 percent. A year before, the distressed sales were more than half of all sales, at 53 percent.
At the same time, national consumer confidence returned in May to its highest level since October 2007, at 79.3.
Florida’s consumer confidence level in April, at 73, “is roughly mirroring the national trend,” said the report.
“Florida growth rates are gradually returning to more typical levels,” the report said. “But, drags are more persistent than past events, and it will take several years to climb completely out of the hole left by the recession.”
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