BEBR in the news
Nearly four years after the start of a devastating recession, South Florida’s recovery barely musters a passing grade.
The hiring landscape can boast of only anemic job growth, but unemployment remains near record highs. Real estate prices are bumping along a bottom. Spending hasn’t kept pace with price increases. Only South Florida’s tourism and cargo industries can boast sustained growth.
“The biggest problem is that this recovery has been much slower than in previous times,’’ said Mason Jackson, head of Broward’s workforce agency. “I lay it on the door of uncertainty. How is this going to work out?”
In December, it will be 48 months since the start of the worst economic downturn Florida has faced in at least a generation and probably since the Great Depression. Just as the recession was more severe than past ones, the recovery that officially began in June 2009 has unfolded at a surprisingly slow pace.
The lack of construction jobs helps explains the recovery’s low marks, said Chris McCarty, survey director at the University of Florida’s Bureau of Economic and Business Research. Past recessions saw construction slow, followed by a sharp rebound in new housing projects and renovations as confidence returned.
“If it was a normal recovery, construction would have already done its job of lifting us out of it,’’ he said. “This one is different. Population growth has been slower to come back.”
Oct 7 (Reuters) - Florida just isn't what it used to be for retirees.
Meet Patti Keagy, an American Baby Boomer, who is looking at other possible retirement destinations.
"My mother says her generation and other people that she knew made a mistake. They sold everything and they moved down to Florida," said Keagy, a resident of a Boston suburb.
"And then they realized, 'We're down here, we're on our own, we're by ourselves, and it's boring or lonely.' And they didn't want to be away from family," added Keagy, who is 60.
Her choices -- and the choices of others -- matter for Florida, Arizona, the Carolinas and other states that long for retired migrants -- and their steady incomes. Their spending on housing, healthcare and entertainment has created jobs and given rise to pockets of Sun Belt affluence.
The demographics -- well, they are a-changing, according to the Empire Center for New York State Policy, an Albany, New York-based think tank. It pointed out that for the first time in 2009, more people left New York state for North Carolina than for Florida.
"A lot of states view that segment favorably and want to attract retirees," said Stan Smith, a specialist in population studies at the University of Florida. "There're lots of places in North Carolina, Louisiana and Georgia with golf communities. Those places are trying to attract retirees."
The city of Gainesville had the fifth-widest income gap in the country from 2005-09, a United States Census Bureau American Community Survey report released this month says.
David Denslow, a research economist at the University of Florida Bureau of Economic and Business Research, attributed the high level of income inequality to two factors — a relatively small city with a large university and medical complex, and the poverty rate and lack of jobs in east Gainesville.
The University of Florida's contribution to the gap is not a cause for concern, but the depressed economic situation in east Gainesville is, Denslow said.
"The east Gainesville factor, we have been worrying about it forever and need to," he said.
UF factors into the income gap because Gainesville is a city of 115,146 with a university that has approximately 50,000 full-time students. Many of those students report little to no income while the university and the Shands medical complex have professors and doctors with some of the higher incomes in the city, Denslow said.
James Dewey, the BEBR program director for economic analysis, said adding a university the size of UF to what would otherwise be a predominantly rural area would always lead to high income inequality.
South Florida is behind only New York in having the widest gap between rich and poor, according to a new Census analysis of major U.S. metropolitan areas.
An influx of wealthy Latin Americans and construction workers thrown out of work by the housing bust led to the wide gap in household incomes in Miami-Dade, Broward and Palm Beach counties, economists said.
The ranking is based on data measuring the range of household incomes from the Census' American Community Survey between 2005 and 2009.
South Florida's income gap widened in part because wealthy Brazilians and other Latin Americans are moving in, said Chris McCarty, director of the University of Florida's Bureau of Economic and Business Research.
Brazilians especially have more cash, he said.
"Brazil has one of the healthier economies in the world," McCarty said.
GAINESVILLE, Fla. — After a modest gain in September, consumer confidence among Floridians fell a point in October to 63, four points above the record low of 59 set in June 2008, according to a new University of Florida study.
The index used by UF researchers is benchmarked to 1966, so a value of 100 represents the same level of confidence for that year. The lowest index possible is a 2; the highest is 150.
“Consumer confidence continues to be in the doldrums, uncomfortably near record low levels here in Florida,” said Chris McCarty, director of UF’s Survey Research Center in the Bureau of Economic and Business Research.
That level of confidence may remain stuck for some time, McCarty said, because “there have been no consistent economic developments over the past couple of months to push confidence lower or raise it from its historically low levels.”
The report found that consumer confidence remains shaky despite reports of slight economic improvement in some sectors. Florida’s unemployment rate, for instance, dropped one-tenth of 1 percent to 10.6 percent, after remaining fixed at 10.7 percent for three months, far better than the record high level of 12.5 percent reached in March 2010.
“One thing to keep an eye on is the size of the labor force,” McCarty said. “Unemployment is the percent of those unemployed but looking for work. When people stop looking, for a variety of reasons, they are not counted. Although Florida’s labor force increased by 14,000 from August to September, it is still down 26,000 from September of 2010.”
Something’s rotten in the state of-er Florida.
A public hearing is slated for 6 p.m. Tuesday on plans by the Florida Department of Transportation to raise tolls at all state toll roads and bridges, including Florida’s Turnpike, about 11.7 percent by next June 30.
Under the plan, the cost of a car ride on Florida’s Turnpike from West Palm Beach to Miami’s Golden Glades Interchange, for example, would rise to $4.60 from $3.80. SunPass holders pay $1 less. Reason cited for the toll hike: Inflation, as measured by the Consumer Price Index.
The plan — hitting already financially strapped Floridians — comes after social security recipients finally get a 3.6 percent raise after three years. But that increase, effective in January, is a significantly smaller percentage than the proposed Florida toll increase — despite the fact that it, too, measures the CPI.
Why this huge discrepancy? Is the CPI, as some have argued, subject to manipulation?
Christopher McCarty, director of the Bureau of Economic and Business Research at the University of Florida, doubts it.
“The Bureau of Labor Statistics is fairly impartial and immune from political intervention,” McCarty says.
The most quoted monthly CPI index —CPI-U — measures changes in prices of all goods and services purchased for consumption by urban households. It includes user fees, such as water and sewer service, and sales and excise taxes paid. Excluded: Income taxes and investments, like stocks, bonds and life insurance.
Florida DOT and the Social Security Administration use different versions of the CPI. Florida DOT measures the CPI-U, or annual average of all expenditure items for all urban consumers, U.S. city average.”
By contrast, the social security cost of living adjustment is measured by the rise in the CPI-W, a subset of CPI-U that gives greater weight to urban wage earners and clerical workers.
GAINESVILLE, Fla. — Florida’s consumer confidence index rose this month to 64, up three points from a revised mark of 61 in August, which was only two points higher than the record low of 59 set in June 2008, according to a new University of Florida survey.
“The increase in confidence this month was mostly a rebound from very low levels in August,” said Chris McCarty, director of UF’s Bureau of Economic and Business Research and Survey Research Center, which conducted the survey.
Of the five components used by UF researchers to measure confidence, four edged upward. Expectations, for instance, that personal finances would rise in the coming year went up five points to 78. In addition, consumer anticipation that the U.S. economy will improve in the coming year rose by one point to 52. There was also a four-point increase to 66 in the overall expectation that the country will see economic gains during the next five years. Meanwhile, confidence that now is a good time to purchase retail big ticket items, such as laptops and cars, rose six points to 74.
“It is not surprising that confidence rose this month as we get further from the debt-ceiling debate,” McCarty said. “Confidence actually rose this month among both younger and older respondents, although it is still at historically low levels. “
The only component to show a decline in September was the perception that personal finances today are lower than a year ago. It fell by three points to 50, which means more consumers are pessimistic.
According to the survey, Florida’s seniors, whose perceptions accounted for much of the decline in August, remain pessimistic about the economy in both the short and long run. Confidence levels of those over 60 are at “record lows,” McCarty said.
As September draws to a close, the holiday season will soon be upon us. It is also the traditional time when consumer spending surges make the annual difference between retailers reaching profits or red ink. But according to a recent consumer study conducted by Princeton Survey Research Associates on behalf of BankRate.com, many consumers have already begun tightening household budgets.
“Forty percent of Americans say they have cut back on spending over the past 60 days due to the roller-coaster stock market or concerns about the economy”, says Greg McBride, Bankrate’s senior financial analyst. “This type of widespread cutback in consumer spending, if sustained for any length of time, is how recessions are born.”
Beyond consumer spending, the study also compared consumer comfort levels today against those of 12 months ago in four other measures: debt, savings, job security and net worth.
Job security was perhaps the worst measure. More than half – 60 percent – job security is as elusive now as it was last year. Conversely, only 16 percent felt their jobs were safer today.
David Denslow, Jr., a distinguished service professor in the Department of Economics at the University of Florida and a research economist for the Bureau of Economic and Business Research offered his interpretation on lingering job insecurity.
“This increased concern ranges from dropouts to college graduates, from the less-skilled to higher earners, from the young to those approaching retirement. And it is remarkable for the beginning of the third year after the official end of a recession. The third years of the previous two recoveries saw rapid job gains. This time may be different.”
Milt and Kay Olson spend every Christmas in north central Wisconsin with their children and grandchildren, enjoying a meal together, sharing stories of Christmases past and exchanging gifts. Then they take down the Christmas tree, load up the fifth-wheel trailer and head south to escape the below-zero temperatures and snow.
The Olsons, who live in the town of Weston, are some of the more than 1 million "snowbirds" in the U.S. and Canada who flee winters in colder climes for Florida, Arizona, Gulf Shores, Ala., and other refuges. Snowbirds flee the frozen north to live in retirement communities, RV parks and condominiums where they walk the beaches, play golf and participate in other social activities while Wisconsin residents count the days until summer.
The Olsons stay in Wisconsin longer than most snowbirds, who typically are getting ready to hit the road right about now -- as leaves turn and temperatures drop near freezing at night. The recession, high gasoline prices and a struggling housing market haven't slowed the migration.
Tracking the number of snowbirds is difficult because studies are inconsistent and dated. A University of Arizona State study found that more than 300,000 winter residents were living in Arizona at the height of the 2002-03 winter season. A University of Florida study showed that 818,000 people spent the winter of 2005 in that state.
Stefan Rayer, a researcher for the Bureau of Economic and Business Research at UF who conducted the 2005 study, said the economic downturn and high unemployment likely have caused that number to drop slightly in recent years. "The pull to Florida has stopped somewhat," Rayer said.
The survey results are in and Florida's old folks are scared out of their wits.
That should give pause to the Republican presidential candidates preparing to debate in Orlando on Thursday.
Normally, voters throw out the bum presiding over a bad economy. But things are so historically bad that shell-shocked seniors may cling to President Barack Obama like a security blanket if they see Republicans threatening their entitlements.
I turn your attention to a monthly survey of consumer sentiment done by business researchers at the University of Florida. It breaks out responses for those over and under the age of 60.
In August, Floridians overall were in a depressed state of mind, indicative of a recession. Leading the funk were seniors, whose sense of economic well-being plunged from July.
Call it a coincidence, but last month is when Rick Perry entered the presidential race. And his depiction of Social Security as a "Ponzi scheme'' and "unconstitutional" got widespread attention.
Obviously the worsening economy played a role in the numbers. But consumer sentiment among those under the age of 60 fell by much less than the older group.
Something else is gnawing on the minds of seniors.
"The fact is Social Security and Medicare now are routinely part of the national conversation and that never happened before," says Chris McCarty, who directs the UF survey. "The reform proposals say people in retirement and near retirement would not be affected. People probably don't trust that."
Seniors' depression over economy may bode ill for Perry - Orlando Sentinel - September 19, 2011