Florida's unemployment rate in January, as reported last week by the Florida Department of Economic Opportunity, dropped to its lowest level in more than four years.
However, an economic overview report this week by the Florida Legislature's Office of Economic and Demographic Research points out that a good chunk of the declining jobless rate can be attributed to people dropping out of the labor force, rather than finding jobs.
Last week's report said that Florida's seasonally adjusted unemployment rate fell by 0.1-point from December to 7.8 percent in January. That was the state's lowest rate since November 2008, when it also was 7.8 percent.
Although the unemployment rate is falling, this week's economic overview report says the state still has a long way to go to get back to pre-recession levels.
The report says that Florida's labor participation rate — the percentage of people in the labor force as a percentage of the entire population — remains below historical averages, because of people who have dropped out of the labor force or delayed entrance into the workforce.
People who are not actively looking for work, often because they are discouraged by their employment prospects, are not counted as part of the labor force. So in and after a recession, many people who have been out of work for a long time are not counted as unemployed, even if they are.
The Office of Economic and Demographic Research report says that Florida's labor participation rate was 60.5 percent in January, below the 25-year average of 62.5 percent.
If the participation rate was the same as it was two years ago, the state's unemployment rate would have been 8.2 percent in January, the report says.
The report has some discouraging news for a recovery in the labor market.
"The job market will take a long time to recover – about 597,200 jobs have been lost since the most recent peak," it says.
"Florida's prime working-age population (aged 25-54) is forecast to add about 2,900 people per month, so the hole is deeper than it looks," it says. "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."
The overview report does have some positive signals from the housing market.
"Building permit activity, an indicator of new construction, is back in positive territory, showing strong (32.4 percent) calendar year growth in 2012," it says.
It also says the median sales prices for existing homes are improving but "are still substantially below the nation as a whole."
Florida also is experiencing high foreclosure rates.
Citing data from RealtyTrac, the report says that foreclosure starts in Florida were 20 percent higher in February than one year earlier.
"Florida's foreclosure rate ranked highest among the states for the sixth month in a row in February," RealtyTrac said.
"One in every 282 Florida housing units had a foreclosure filing during the month – more than three times the national average. A total of 31,726 Florida properties had a foreclosure filing during the month, up 6 percent from the previous month and up 20 percent from February 2012 to a 16-month high."
The overview report says the state's homeownership rate, at 67 percent, is the lowest it has been since 1998.
The report sees a continued slow recovery for Florida's economy.
"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."
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