The national economy continues to improve, and Jacksonville’s economy is outperforming the rest of the country, according to the University of North Florida’s Local Economic Indicators Project.
The latest edition of the organization’s quarterly economic newsletter, LEIPLINE, said there are some issues that could derail growth but “despite all of these less than optimal structural concerns, the economy domestically is improving and Jacksonville continues to outperform the national averages in most categories.”
UNF economist Paul Mason, who heads LEIP, said he is optimistic about the trends.
“Things are finally looking up,” Mason said. “The economy has finally started to improve despite the government.”
LEIPLINE argues that government stimulus programs are not responsible for the economy’s turnaround.
“Despite the ineffectual government fiscal and monetary policy initiatives of the last five years, the economy is starting to improve more rapidly, delayed by the red tape, changes in health care, burdensome regulatory increases, and general pessimism that businesses have generated having to deal with such a climate,” it said.
“Let’s hope that as the economy improves, government officials continue to claim victory and stay out of the way so that the private sector has the autonomy to complete the task.”
LEIP, which collects and analyzes data for the Jacksonville metropolitan area, has found several positive factors in the local economy, including a higher inflation rate. Although nobody likes to see prices go up, inflation is a sign of growing economic activity.
The inflation rate for the Jacksonville area was 2.3 percent in the fourth quarter and 3.06 percent for all of 2013, LEIPLINE said.
“This outcome is far and away the largest rate of inflation we have experienced in Jacksonville in the twelve years we have been collecting LEIP CPI data,” it said.
An improved housing market was the primary reason that prices rose, but other price categories showing increases included used cars and trucks, renter’s insurance, food away from home and lodging away from home.
“If the local economy remains strong, we can anticipate a continuation of inflation rates of the same magnitude as last year in 2014,” LEIPLINE said, but January’s CPI for the Jacksonville area declined, due to cold weather.
The labor market continues to improve, with Jacksonville’s unemployment rate falling below 6 percent for the first time in five years in the fourth quarter.
“Virtually universally during the last few months of 2013 the number of workers employed rose along with the work force while the number of unemployed fell; thus all movements were positive. This is a very positive sign,” LEIPLINE said.
Another positive indicator was an increase in stock prices for Jacksonville area companies in the fourth quarter, along with national stock market indexes.
LEIP’s index of leading economic indicators for the Jacksonville area was “exclusively positive” in the second half of 2013, “an unprecedented stretch since we began collecting LEIP data,” it said.
“Both the local and national economies are finally showing signs of strong growth. Evidence inherent in the leading economic indicators and the rising price levels in the CPI except for January, along with the improving local stocks and falling unemployment rates, suggest that the recovery is gaining the momentum that we would certainly have hoped would have come some three years ago,” LEIPLINE said.
“There does not seem to be anything immediately evident that will stand in the way of continued growth, but there are several uncertainties that could become problematic,” it said.
A major concern is the possibility of tax increases, LEIPLINE said. It said history shows that politicians tend to raise taxes as the economy improves, and that could hinder the recovery.
“It seems unlikely that President Obama will be more constrained in this regard, so the improvement can still be curtailed, but our local officials need to also heed the experiences of history and not stall economic growth with excessive tax increases locally and at the state level just as we are seeing the light at the end of a way too long tunnel,” it said.
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