Florida Jobless Rate Declines In June, But Experts Temper State’s Economic Forecast

Job growth throughout the Sunshine State is slowing as specialty contract jobs take the forefront, and a decline in the Florida housing market and rising interest rates are leading to a dropoff from 2004’s economic peak, according to the Miami Herald.

Statewide unemployment continued to drop in June, although the number of jobless in Miami-Dade and Broward counties inched up slightly from the month before. Overall, unemployment in Florida dropped to 3 percent from 3.2 percent in May. The state has added 270,900 jobs since June of last year, more than 40 percent of which came in construction or in the wide-ranging professional and business services categories.

While job growth in construction continues to be strong, the rate of growth has slowed from its peak in 2004, a trend the state attributes to a cooling off in the housing market and rising costs of Florida home loans. This was the conclusion of the Agency for Workforce Innovation in its monthly report released on Friday.

• Miami-Dade’s 3.8 percent unemployment rate in June, which is not seasonally adjusted, compares to 3.5 percent the month before.
• Broward’s 3.1 percent jobless rate marks an increase of 0.3 percent, up from 2.8 percent in May.
• Both counties, especially Miami-Dade, are seeing significantly lower numbers of unemployed people than in June 2005, however.

Some companies’ analyses show that jobless rates in Broward and Miami-Dade actually dropped between May and June. But due to frequent hikes in interest rates and a slower housing market, analysts are universally sounding a more cautious note than they have in the past about the overall forecast for Florida’s economy.

“Home sales are slowing, and inventories are backing up. There are a lot questions on the cost of insurance. There are businesses moving away from Florida, which we’ve never seen before,” Wachovia Senior Economist Mark Vitner said.

Decelerating residential markets in other parts of the state are happening faster than originally predicted and expects the same will happen soon in South Florida. Still, many think that costs going down are essential as a way for Florida to regain its competitive advantage.

“Right now when you combine the run-up in housing prices with higher interest rates and soaring insurance costs, Florida’s pricing a lot of people out of the market,” he said. “People are saying, ‘I can’t afford to live here,’ and businesses are saying, ‘I can’t afford to operate here.’ We need to see some slowing.”

Increasingly expensive Florida home loan costs and soaring housing values have led to a state of sticker shock for many buyers, while rising insurance premiums have made both commerical and residential property owners worried. Hopefully a return to normalcy is in order and Florida’s job market remains in optimal condition.