While Florida’s unemployment rate has fallen to its lowest level in nearly five years, a report by the Legislature’s economic research arm says the labor market is still feeling the impact of potential workers who have dropped out of the labor force.
An economic overview report last week from the Florida Legislature’s Office of Economic and Demographic Research said that while the state’s unemployment rate fell from 9.4 percent at the end of 2011 to 7.2 percent in April, the drop has been helped by people who are not looking for work and are not counted as unemployed.
The report said “36.4 percent of the drop in the unemployment rate is due to people dropping out of the labor force or delaying entrance.”
If the labor force participation rate was the same as it was in December 2011, the real unemployment rate would be 8 percent, it said.
On Friday, the Florida Department of Economic Opportunity reported that Florida’s jobless rate fell to a seasonally adjusted 7.1 percent in May, the lowest level since September 2008.
The Legislature’s economic research department said, as it has in previous reports, that Florida still has a long way to go to recover completely from the recession. From March 2007 through March 2012, jobs in Florida fell by 8.9 percent.
“The job market will take a long time to recover — about 549,300 jobs have been lost since the most recent peak. Rehiring, while necessary, will not be enough,” the report said.
In addition to finding jobs for existing participants in the labor force, Florida’s “prime working-age population,” ages 25 to 54, is projected to grow by 2,900 per month.
“It would take the creation of about 900,000 jobs for the same percentage of the total population to be working as was the case at the peak,” it said.
However, while the recovery will be long, Florida’s economy is improving. The report said 2012 was the third straight year of positive economic growth, after two years of declines.
Florida’s gross domestic product rose by 2.4 percent last year, slightly below the national average of 2.5 percent but the 14th best growth rate in the nation.
Floridian’s personal income grew by 3.2 percent in 2012, ranking the state 31st in the nation. The national growth rate was 3.5 percent.
Housing activity continues to improve, the report said. After growing by 32 percent in 2012, building permits in Florida were up 51 percent in the first four months of 2013.
However, foreclosures remain a problem, particularly in the Jacksonville market. Florida’s foreclosure rate was the highest in the nation at 34 percent in May, compared with a national rate of 1 percent.
Citing data from RealtyTrac, the report said there were 85,671 foreclosure filings in Florida in the first quarter this year.
Jacksonville has the second-highest foreclosure rate in the nation, behind Miami, the report said. Six of the top 10 metropolitan areas for foreclosures are in Florida.
The average time to foreclose a property in Florida is 893 days, or 2.4 years, it said.
The April median sales price for homes in Florida reached its highest level since October 2008, but it remained 14.6 percent lower than the national median.
Florida’s homeownership rate has dropped from a pre-recession peak of 72.4 percent to 66.8 percent in the first quarter this year, but that brings it close to the long-term average rate of 66.3 percent.
Overall, the state’s outlook hasn’t changed since the office’s last report in March.
“Florida growth rates are gradually returning to more typical levels. But, drags are more persistent than past events, and it will take a few more years to climb completely out of the hole left by the recession,” it said.
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