The chances of a recession in Florida have increased to more than 34 percent, notwithstanding declines in the state’s unemployment rate and other positive trends, according to an analysis by the pro-business Florida Chamber of Commerce.
Meanwhile, Bay and Gulf counties – both hit hard by Hurricane Michael last October, have seen declines of more than 3 percent in their workforces, reflecting the struggle for businesses to get back on their feet.
The data are included in the Chamber’s Florida Scorecard for August. The scorecard is a periodic update on economic trends.
Jerry Parrish, the Chamber’s chief economist, estimated the chances for an economic downturn at 34.2 percent – a figure “substantially” above the estimate of 20.8 percent in April, he said.
“There are several things going on. Most especially affecting this is the yield curve inversion that has happened. These inversions are getting deeper, and have often signaled recessions in the past,” Parrish said in a video explaining his data.
“It doesn’t mean we’re destined to have a recession, but the reduction in business investment that’s happening, along with the global slowdown, do increase the odds of it happening.”
Such inversions happen when long-term interest rates sink below short-term rates, flipping the usual relationship – the longer the terms of an investment, the bigger the risk of something going wrong before the investment matures. The yield on three-month and 10-year Treasury bonds have been inversed since May.
The Chamber found evidence of a skills gap in these numbers: 285,100 jobs were on offer while 344,000 Floridians were looking for work. The scorecard points to positive contributing trends including rising graduation rates from high school, colleges, and universities – but also to setbacks including declines in eighth grade reading and science scores and participation in apprenticeship programs.
Florida’s unemployment rate was 3.3 percent and declining. The job growth rate, at 2.6 percent, continued to outpace the national trends, at 1.5 percent. Florida ranked No. 2 among the states, behind California, in terms of jobs created, at 902,546. It ranked No. 4 in its jobs growth rate, at 13.4 percent.
The leading sector was education and health services, with 65,900 jobs created, or 5.1 percent. The construction sector accounted for 21,300 new jobs, but the 3.9 percent growth rate was slowing down.
Job growth was led by Florida’s urban centers – Miami-Dade, Orange, Broward, Palm Beach, and Hillsborough counties. Seven counties lost jobs, led by hurricane-damaged Bay County at 2,753. The much smaller Gulf County lost 191 jobs and tied Bay in terms of the loss rate, at 3.1 percent. Also losing jobs were Taylor, Highlands, Hardee, Madison, and Liberty counties.