TALLAHASSEE (CBSMiami/AP) – A new job report released Tuesday by the state of Florida show unemployment rates are dropping, but not for reasons you may think.
State economists contend that Florida’s unemployment rate — which has been dropping since Scott took office— is largely going down now because people are dropping out of the work force not because they are finding jobs.
The report says that the state’s unemployment rate would actually be 9.5 percent if the number of workers in the state had held steady since last December.
The current rate is 8.6 percent and has dropped 1.3 percent in the last six months. But economists point out that 69 percent of the recent drop is due to people no longer being considered part of the work force.
State officials will announce the June unemployment rate on Friday.
The report could also point to political reverberations for both President Barack Obama and Gov. Rick Scott whose fortunes appear to be linked to job growth. Florida is a key swing state that could help decide the 2012 presidential election.
Gov. Scott has insisted that the state’s dropping unemployment rate is due to changes that he has been pushing such as an effort to remove regulations and create jobs. Scott came into office promising to create 700,000 jobs over seven years.
But that promise could be a tall order.
“The job market will take a long time to recover,” states the report from the Office of Economic and Demographic Research, which uses economic projections to come up with forecasts used to balance the annual state budget.
The report warns that the “hole is deeper than it looks” because the number of people in the prime working age is growing at the same time.
Scott spokesman Lane Wright pointed out that state economists have not identified the reasons why the work force is shrinking and said it could be due to a number of reasons such as people retiring.
“Gov. Scott recognizes we still have a long way to go,” Wright said. “We are not going to stop working to create jobs until everyone who wants a job in Florida has one.”
Overall the economy is starting to slowly recover, but state economists added that “it will take a few more years to climb completely out of the hole left by the recession.”
Other highlights of the report include:
— Foreclosures in Florida are up 23 percent for the first six months of 2012 over the previous year. That’s the fifth-highest foreclosure rate in the nation.
— Existing home prices are rising and building permit activity is on the rise, but existing home sales are “sputtering.”
— Population growth is forecast to be relatively flat and is expected to average less than 1 percent between 2011 and 2014.
— Florida’s personal income grew 0.7 percent in the first quarter of 2012, ranking the state 38th in the nation.
Economists wrap up the report by concluding that the economy will improve with help from lower home prices that attract buyers and that the state’s population could start growing again as baby boomers begin to retire.
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