Unemployment in Florida falls to 6% by 2018?

Florida's job market is headed the wrong direction again, and there's growing concern it may get a little worse before it gets better.

The state's unemployment rate ticked up slightly to 11.5 percent in July, reversing three months of declines. A statewide group of economists predicts the rate will move up to 11.8 percent later this year when more discouraged job seekers now on the sidelines re-enter the market and federal stimulus dollars dry up.

Florida's unemployment rate, up from 11.4 percent in June, translates to more than one million jobless out of a labor force of 9.2 million. Add in discouraged Floridians not counted as looking and part-timers unable to find full-time jobs, and the broader unemployment rate would be 19.8 percent, state officials said.

In a media conference call, AWI chief economist Rebecca Rust said mixed signals are typical in the "trough" of a recession. She called it more likely "a lull in the recovery" rather than the start of a double-dip recession.

"Why is it taking so long for us to have our economic recovery?" Rust asked aloud before proceeding to suggest a flurry of reasons. Among them:
• Credit conditions are tight.
• The traditional relationship between companies posting higher profits and then adding jobs appears to be gone.
• Consumers are more frugal and, even if they wanted, can no longer tap their home equity to spend like they used to.

"It's the paradox of thrift," Rust said. Tight-fisted consumers "improve their personal household standing, but it ends up hurting the economy with less consumption."

"We knew the recovery process was going to be extremely drawn out," said Mark Vitner, who tracks Florida as a senior economist with Wells Fargo. "The economy looked as though it was improving more than it actually was because of all the stimulus spending and a boost from inventory rebuilding. Now that those two factors are slowing, we're seeing what appears to be a broad-based slowdown in the economy."

Economists with the Florida Economic Estimating Conference predict the jobless rate will top out at 11.8 percent in the third and fourth quarter before beginning a very gradual retreat. The conference doesn't expect unemployment to get back into the single digits until 2012 and sees it eventually falling to a healthier range of 6 percent by the fiscal year 2017-18.

See the full story, "Florida's unemployment rate ticks up to 11.5 percent"  by Jeff Harrington at the St. Pete Times website.
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