South Florida: An outpost of outlier economic data on jobs and inflation
As President Joe Biden picks up his re-election campaign pace, administration officials increasingly are out making their case that the American economy is strong with low unemployment and cooling inflation.
That storyline isn't quite the case in South Florida, where economic data for both measures show remarkably low unemployment but stubbornly high inflation.
The job market is humming along. Hiring pick-up nationwide in January with companies adding 353,000 new jobs. That represented a much stronger beginning of the year than anticipated. The unemployment rate held steady at 3.7% as more people joined the workforce.
More local data isn’t quite as recent as January. However, unemployment in Miami-Dade County in December was the lowest in the nation. At 1.6%, the county jobless rate has remained below 2% since last summer. It is a remarkably low unemployment rate. It averaged over 3% during the two years prior to the COVID-19 pandemic and was over 7% in the years after the Great Recession.
White House Council of Economic Advisers Chairman Jaren Bernstein called it a “super tight job market” in an interview with WLRN. There were about a half million job openings in Florida in November, the latest month of data from the Bureau of Labor Statistics. That month there were 324,000 people counted as unemployed in the state.
“The recipe for strong real wage gain is a tight labor market,” Bernstein said. Here again, Florida’s stat is stronger than the nation, but the bigger picture is more complex.
The low unemployment rate has helped boost pay. The media annual paycheck in Florida grew by 5.7%, according to payroll processing firm ADP. That’s the strongest annual bump in at least three years and well above the national growth rate.
The median yearly paycheck in Florida is now over $50,000. Yet, that remains well below the national median salary of almost $59,000. At $52,000 a year, the median salary in Florida is the second lowest in the southeast. Only Mississippi’s median annual pay is lower.
“The combination of tight labor markets and labor power tends to increase workers' bargaining clout in ways that help on the wage side,” said Bernstein.
The largest wage gains are seen with the youngest workers. Half of young adults saw their average pay increase by at least 11% from a year ago nationwide. Prime-age workers between 35 and 54 had a median boost of 5.2%.
The hospitality industry, which has long dominated Florida’s job landscape, led all industries by increasing median income. Still, the business remains a low-wage industry. Despite median pay jumping 6.3% in the past year, the median salary is below $34,000. That works out to a little more than $16 an hour for full-time work.
“I think the other thing that we can do to help in Florida is to make sure that the investment agenda is reaching folks,” Bernstein mentioned.
Specifically, the administration has been more vocal about three pieces of spending legislation — the Bipartisan Infrastructure Law, the CHIPS and Science Act and the Inflation Reduction Act. Together, they spend almost $2 trillion over the next decade on transportation infrastructure, clean energy and technology manufacturing.
South Florida may be a place for the administration to tout its employment record, but inflation is far more complicated.
While the national Consumer Price Index has fallen significantly from its pandemic high, the regional inflation rate remains elevated and dominated by the influence of higher home prices and rents.
“Yes, inflation remains too elevated. There are prices that remain too high, but for the most part, at least across the country, wages are beating prices, which means that people's buying power is going up,” Bernstein said.
National inflation slowed to a 3.4% annual clip in December — about on par with the median wage increase over the past year. But South Florida inflation clocked in at 5.7%, eroding the median pay bump.
The regional price index for meat and eggs, an alcoholic drink and shelter show higher increases than the national data. South Florida electricity prices have jumped almost four times the national inflation rate for power. Even stripping out housing, the regional inflation rate is above the national figure.
“We want to continue building on this progress on inflation, but thankfully, it's been coming down at a good clip,” Bernstein said.
One bright spot is for South Florida drivers. Gasoline prices fell faster here than nationwide last year. It is one of the few spending categories to show an actual decrease in prices. Used cars and trucks are another one. Otherwise, most items have not seen prices fall. Rather, the rate of price increases has slowed.
Economic issues traditionally dominate voter concerns during elections. While that remains the case according to several recent surveys, Florida voters tell pollsters affordability issues, not specifically employment, are top concerns.
Property insurance was the top issue among male voters in a Florida Chamber of Commerce survey. Education was the highest concern for female voters. Addressing the state’s home property insurance crisis was a close second in an Associated Industries of Florida poll after a more general cost of living concern. That was the same top problem identified by registered voters identifying as Hispanics conducted late last year by FIU.
Voters seem less impressed by job gains and more concerned about persistent inflation seeping away the spending power of their paychecks.
“I think when you have an economy that's as strong as we've been talking about,” Bernstein said,”(employment) probably not the first thing on your list of worries. But, boy, if it wasn't there, it would shoot up to first place, pretty quickly.”