This year will mark five years since COVID-19 gripped society and brought the global economy to a halt. Florida's fast reopening and quick recovery brought attention, capital and people to the state, especially South Florida.
Five years on, regional job growth seems to be slowing, inflation has cooled, wage growth has stagnated and the housing market is divided.
Overall, the year begins with South Florida economic data in pretty good shape. The economy continues growing, though at a slower pace than in the past few years. That’s not necessarily a bad thing. The South Florida economy was racing out of the pandemic years and that brought its own challenges, some of which are still hanging around like a holiday guest who just won’t leave. Like inflation.
South Florida's unemployment rate has been trending a little higher since last spring. It was 3% in November. While that’s up, a 3% jobless rate is still very low.
A couple of points from the latest data are interesting. The number of people counted in the labor force — people who are available and willing to work — actually fell over the past year. This is data for November, which is the beginning of tourist season, and so there is usually seasonal hiring going on. But there were fewer people working this November than last year.
It means companies have slowed down hiring. And people who were on the sidelines of the job market have slowed down returning to looking for work, too.
It is wise not to read too much into these monthly changes. After all, the lowest unemployment rates in the state in November were in Miami-Dade County and the Keys.
For those working or finding new jobs, pay has been sluggish.
People making minimum wage got a pay bump last week. The state minimum wage increases $1 to $14 for people who don’t get tips. For workers who get tips, the minimum wage now is just below $11 an hour.
Overall, paychecks have been growing. Average weekly earnings in South Florida were up about 2% in November from a year ago. The highest average pay increases were in Miami-Dade County. Average pay in Broward County actually fell slightly.
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However, the pay raises in South Florida captured by this data from the state pale in comparison to the overall state figure. Statewide, average weekly earnings were up more than 6% in November. And the South Florida earnings trail what workers in Jacksonville, Tampa and Orlando make.
Still, there was good progress on inflation last year. 2024 began with regional prices increasing over 5%. Today, it’s about half that. So inflation has slowed down. That’s good news for consumers.
But — and it’s a big one — inflation remains higher than wage growth. That means people are still having a hard time getting ahead. The new dollar in a paycheck is not going as far as it did before the pandemic.
Rent prices exploded over the past few years. There are various measurements, but most agree that average rents are no longer going up and some landlords may even be reducing asking rents, especially as thousands of new rental apartments are coming on the market.
The pace of condominium sales has been dropping for months. Median prices have not, though, thanks to a brisk business of selling new luxury condos. What is concerning is older condos. New requirements after the Surfside collapse have meant some older condo buildings are facing special assessments and higher monthly fees. Those make owning a condo more expensive.
And single family home prices edged a little lower in November for existing homes. It may not be a canary in the coal mine, though, for homeowners. The National Association of Realtors predicts South Florida home prices will increase 9% this year.
There will be a new president in about two weeks. And Donald Trump's return to the White House brings at least three big policy changes with the potential for big impacts on the regional economy: taxes, tariffs and immigration.
Massive deportations like the president-elect has promised threatens to upset the workforce here. The Migration Policy Institute estimated there were over 300,000 undocumented people of working age in the region. That’s about 10% of the workforce, so it would represent an enormous economic impact.
Miami International Airport, PortMiami and Port Everglades are big sources of trade so what happens with tariffs may hurt or help activity. That is bound to have a ripple effect in South Florida's transportation and warehousing industries.
And if Congress does not extend the tax cuts that were okayed in 2017, it means higher income taxes for many workers beginning in 2026.
