Florida’s jobless rate is now lowest among large states. But its economy may be forever changed
Florida’s unemployment rate is now the lowest among any large state in the nation.
But the figure, now below 5% for the first time since last March, only tells part of the state’s recovery story.
On Monday, the Florida Department of Economic Opportunity said the state jobless rate fell from 5.1% in December to 4.8% in January. That is now the 18th-lowest rate among all U.S. states — and lower than Texas’ 6.8%, Illinois’ 7.7%, New York’s 8.8% and California’s 9% rates.
It is also below the national rate for January of 6.3% and 6.2% for February.
The rapid decline in the unemployment rate shows Florida is now approaching the 3.2% decade-low unemployment figure reached just before the pandemic — a level economists considered full employment. If the state’s jobless rate continues to fall by 0.3 points each month going forward, it would be back at the pre-pandemic rate by the end of the year.
“Florida’s economy remains resilient under Governor DeSantis’ leadership as we continue to see sustained month-over-month job growth,” said Dane Eagle, executive director of the Florida Department of Economic Opportunity, in a statement. “Governor DeSantis has kept our state open for business, and I am proud of the work we have done to ensure Floridians continue to return to the workforce.”
But the state’s jobs picture may look different going forward.
That’s because the state’s overall labor force — comprising the number of both employed and unemployed workers — is at 10.7 million, down 390,000, or 3.7%, from where it was prior to the pandemic.
In other words, more people are giving up looking for a job entirely and leaving the workforce altogether.
“The labor force is changing — there are a lot of folks who left it for various reasons,” said PNC economist Abbey Omodunbi.
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He cited health concerns, the need to home-school children — something that has disproportionately affected female workers, whose employment remains devastated nationwide — and early retirement as factors all reducing the overall pool of available workers.
What jobs are being added are coming slowly. The state’s all-important leisure and hospitality sector remains nearly 300,000 jobs short of its pre-pandemic levels. Overall, the state’s employment level remains 530,000 below pre-pandemic totals.
The state’s labor force has now grown for three straight months — the best stretch since the start of the pandemic. Yet even if growth rates remained steady at January’s addition of 25,000 new workers — employed and unemployed — each month, it would take at least another 15 months for the state’s labor force to regain its pre-pandemic level of about 59%.
America’s labor force participation rate has been in decline for decades, although it held relatively steady in recent years, at about 62%. Economists say the pandemic could reduce participation again.
“Labor force participation is expected to recover from its historical plunge over the next two years, but not to its pre-pandemic peak,” research group Oxford Economics said in a recent note to clients.
While younger workers have largely returned to the workforce, Oxford found, older workers are less likely to be back — an acute condition in the Sunshine State, where the median worker is 42.9 years old compared with 41.6 nationally.
Nevertheless, Omodunbi sees outsized progress for Florida’s economy, thanks largely to looser COVID restrictions and the willingness of Florida to welcome COVID-weary travelers from other parts of the country.
More recent data bolster the latter trend: After being down about one-third at the beginning of January, hotel occupancy in Florida was off just 20% for the first week of March, according to data from tracking firm STR — and even better in Miami, where it was down just 11%. Average daily rate was even stronger: off 14% on the year to kick off March in Florida and down less than 7% in Miami.
It’s a sign that, even though Miami-Dade registered the state’s highest county unemployment rate in January, at 8.1%, the state’s next data release March 26 is likely to show a cheerier picture.
“Florida again had the highest occupancy of any state in the week even though it fell slightly compared to the previous week,” STR said in a release last week. “Nearly all Florida markets saw week-on-week occupancy fall except for a handful, which were mostly beach markets. Despite the weaker performance, nine of the 10 highest weekly occupancy markets continued to be in Florida.”