BEBR in the news
More than one in six Floridians are living poverty — the highest it has been in more than a decade, according to Census figures released this week.
Sixteen percent of Floridians were below the poverty level in 2010, up from 14.6 percent in 2009 reflecting a continuation of a steady climb in recent years. Florida’s 2010 rate is the highest it has been since 1995 when it was 16.2 percent.
Florida’s poverty rate was slightly above the nation’s official poverty rate of 15.1 percent, up from 14.3 percent in 2009 and the third consecutive annual increase, according to the Census bureau. That rate was the highest since 1993 but was 7.3 percentage points lower than the poverty rate in 1959, the first year for which poverty estimates are available, according to the Census bureau.
The poverty information was based on a survey of about 100,000 households and is used to set the national poverty rate. Later in September the census bureau will release more detailed poverty information through the American Community Survey based on a survey of about three million households. That information will include poverty rates for large cities including Miami and Fort Lauderdale.
The census data reflects the first full calendar year after the December 2007-June 2009 recession.
"Given the state of the economy the last couple of years, you would expect the poverty rate to increase nationwide and in Florida," Stefan Rayer, a research demographer at the Bureau of Economic and Business Research at the University of Florida, said in an email. "While the 2010 poverty rate in Florida is higher than during the last decade, there were several years since 1980 when the rate was higher still (16.2 in 1995, 17.8 in 1993, 16.6 in 1981, and 16.7 in 1980). ... When the national poverty rate is high, Florida’s poverty rate is often somewhat higher but lower than that of other states in the South."
MIAMI (Reuters) - Florida seniors were so rattled by proposed changes to Social Security emerging in the U.S. political debate that their Consumer Sentiment levels plunged more than that of any other age group in August, an economic survey showed.
And that was before Texas Governor Rick Perry called the popular retirement program a "Ponzi scheme" during last week's debate among Republican presidential candidates.
It would be difficult to overstate the impact of Social Security in Florida, a longtime retirement haven that is the most populous of the political swing states.
Consumer Sentiment among Floridians over 60 plunged nine points to 57 in August, according to the latest monthly survey conducted by the University of Florida's Bureau of Economic and Business Research.
It was the biggest drop among any age group in the survey, which put the overall Florida confidence score at 62, barely above recession level.
"A lot of that had to do with the frank and open candidate discussions about including modifications to Social Security and Medicare as part of the solution" during the contentious debt limit debate in July and early August, said bureau director Chris McCarty, who conducted the survey.
"As the discussions and the media attention and all that rolled out, people became increasingly nervous. ... In Florida, obviously, we're disproportionately seniors."
Social Security is funded by payroll taxes and has not contributed to the deficit, but it has increasingly become a target of politicians who want to reduce the size and role of government. Prospective changes in Medicare, the government health insurance program for the elderly, and in military retirement benefits also weigh heavily in Florida.
"There's absolutely no clarity about what will happen," McCarty told Reuters. "That's why seniors are so gloomy, particularly for those folks who are completely dependent on those entities. Many of them don't have an option of doing something else."
The National Association for Business Economics has trimmed its forecast for U.S. economic growth to 1.7 percent from 2.8 percent.
NABE cites a laundry list of reasons for revising its forecasts lower, including low consumer and business confidence, uncertainty about future economic policies, a weak housing market and tight credit. The association’s panelists say they are also very concerned about high unemployment, the federal deficit and the European debt crisis.
The forecast would not be a surprise to many Floridians. Consumer Sentiment in the state decreased to a near-record low in August, according to a University of Florida survey. The mark of 62 is only three points higher than the record-low 59 set in June 2008.
“If past history of this index is any indication, we are in, or at least very near, a recession," said Chris McCarty, director of UF's Bureau of Economic and Business Research, when it was issued. "We are not likely to know for certain until after the fourth quarter.”
WASHINGTON — In job-starved Florida, President Barack Obama's nationally televised address to Congress sparked renewed hope on Friday that a burst of federal spending and tax incentives would prompt companies to begin hiring again.
Business leaders welcomed Obama's proposal to extend and expand a cut in payroll taxes and to dispense tax credits for hiring the unemployed. They were especially enthused about his call to ratify long-awaited trade pacts with Colombia, Panama and South Korea, which could expand Florida's share of the world market.
Worker advocates hailed Obama's attempt to extend emergency unemployment benefits, which are scheduled to expire later this year, as well as proposals to help communities rehire teachers and to pour more money into construction of schools and highways.
Perhaps most significant, business and labor leaders generally agreed that Congress should set aside partisan conflicts and strike a deal to rev up the economy.
The reaction was surprisingly upbeat, given the state's persistent unemployment and widespread cynicism about Obama's prior attempts to stimulate the economy. For a day, at least, a call to spur the economy eclipsed concerns about the national debt.
Still, on the day after the president's speech, hope was tempered by skepticism about Washington's ability to get anything done and about whether the president's plan, if adopted, would actually work.
A big question is whether companies that are sitting on lots of cash will be motivated to expand and hire more people. The answer from a sample of business leaders on Friday was yes, but not in huge numbers — and not right away.
Consumer demand would prompt companies to meet it, which often means hiring more workers.
The Obama plan "will definitely have an effect on Consumer Sentiment," said Chris McCarty, who directs consumer surveys at the University of Florida. His latest survey shows Consumer Sentiment only slightly higher than the record low in June 2008, when Florida was hemorrhaging jobs and housing values were plummeting.
"This could give a temporary lift," he said, "and a more permanent one if it were to work."
WASHINGTON — For five months, Bob Bloom has watched his business spike and dip, just like the stock market. After a great April, he suffered his worst July in six years. There was so little work "we sat around looking at each other," he said. Then, sales skyrocketed in August.
Earlier this week, Bloom worked until 9 p.m. to keep up with orders at his business, Ink & Toner USA in suburban West Palm Beach. He's again thinking of adding another employee to his four-person team.
Bloom is just the kind of business owner President Obama hopes to appeal to tonight when he lays out his plan to boost jobs in America. Yet the small business owner says there's virtually nothing the president could offer him - other than paying for the employee - that would guarantee Bloom will start interviewing.
"It's not predictable out there. The business has to justify hiring," he said. "I don't look to Washington to give me incentive to hire."
When Obama takes to the airwaves to address a joint session of Congress, he will be speaking to a skeptical public who, like Bloom, need concrete plans and not words to gain faith that the economy will improve.
The president is expected to propose spending roughly $300 billion on a package of tax cuts, infrastructure spending and aid to state and local governments, according to details of the plan that have leaked. The majority of the spending would go to extending unemployment benefits and a payroll tax reduction that saves the average working family close to $1,000.
Another widely reported facet of Obama's plan is a public/private infrastructure program that would include not only traditional roads, schools and power plant projects, but also soft infrastructure such as high-speed Internet for local governments and communities without it. The president is also expected to include money for local governments, as he did in his first stimulus plan, that would prevent teacher layoffs, for example.
Obama's jobs package could spur the creation of 75,000 to 150,000 jobs, said David Denslow, research economist for the Bureau of Economic and Business Research and professor in the University of Florida Department of Economics.
"We need that, but we certainly need far more than that," Denslow said.
Rather than extending the 2 percentage point payroll tax reduction, Obama instead should offer a tax credit solely for low-income workers, such as a household earning less than $30,000 or $40,000 a year, Denslow said. Those taxpayers are more likely to spend any money they save than higher wage earners who may instead pocket the payroll tax savings.
"You could probably get twice the jobs for the money," Denslow predicted.
GAINESVILLE, Fla. — Consumer Sentiment among Floridians decreased to a near-record low in August, according to a new University of Florida survey. This month’s mark of 62 is only three points higher than the record-low 59 set in June 2008.
“Although none of the index components were at record lows, the combined decrease in confidence across all five components is remarkable,” said Chris McCarty, director of the Bureau of Economic and Business Research. “If past history of this index is any indication, we are in, or at least very near, a recession. We are not likely to know for certain until after the fourth quarter.”
All five of the index’s components decreased, most notably perceptions of U.S. economic conditions over the next year, which fell six points to 51; perceptions of U.S. economic conditions over the next five years, which dropped six points to 63; and confidence to purchase big-ticket items such as cars and appliances, which dipped five points to 70. Perceptions of personal finances now compared with a year ago dropped four points to 54, and expectations of personal finances a year from now fell one point to 74.
A loss in confidence among women and seniors played a major role in the fall. Confidence among women dropped eight points to 59 and confidence among those age 60 and over fell nine points to 57. The loss in confidence among seniors was surprising because confidence among seniors rose five points in July, McCarty said, but the debate in Washington over raising the debt ceiling and other issues may have finally taken their toll.
“This is no doubt influenced by debt reduction talks, which now routinely include modifications to Medicare and Social Security as part of the solution,” McCarty said. “As there are no clear details about potential changes, some seniors are becoming unnerved. Their concerns are further fueled by wild swings in the stock market.”
Florida, once the nation's oldest state, is losing some of its gray.
Thanks to a lull in retiree migration and an increase in working-age adults, Florida has dropped three places to become the fifth-oldest state in the nation, according to census data released Thursday.
The figures show that over the past decade, residents ages 18 to 64 propelled Florida's growth in boom counties on the periphery of major metro areas, including Orlando and St. Petersburg.
At the same time, traditional retiree havens such as Broward and Pinellas counties lost seniors and gained working-age adults. Even Venice, with one of the state's oldest populations, saw its median age decrease by a little more than a year.
Gulf Coast counties with large numbers of retirees, such as Hernando and Pasco, saw their concentration of seniors diluted with the arrival of younger residents.
Retirees fuel most of Florida's growth, said Scott Cody, a demographer with the Bureau of Economic and Business Research at the University of Florida. Typically, that keeps Florida's median age higher than most states.
In the late 2000s, however, the economic crash and real estate bust slowed Florida's growth considerably. Fewer retirees moving in may have slowed Florida's aging, Cody said.
Further, Florida growth has been augmented in recent years by international immigrants who may be younger than Florida's traditional retirees, Cody said.
"Clearly we're heavily dependent on in-migration and domestically, I'm pretty sure we're getting less older people. Internationally we might be getting younger people," Cody said.
The stock market's recent Tower of Terror routine — hair-raising free falls followed by a quick bounce back up — was enough to ramp up already heightened fears of a second recession. But unlike the Disney ride, the panic isn't coming to an end any time soon.
Concerns about a double-dip picked up momentum as the Standard & Poor's downgrade of U.S. debt and market drops gripped the nation with renewed anxiety.
Our psyche will play a big role in whether the economy will remain in its slow-motion recovery or, worse, slump into a true downturn.
Central Florida is still struggling to find its footing since the last recession technically ended in June 2009. How much lower can we go? Housing has already been wiped out. Consumer Sentiment is at historically low levels. And good jobs are harder to come by than a British tourist with a tan.
Here in Orlando, the recovery has been propped up by tourism. Local hospitality jobs are leading the state in job growth.
"It's pretty clear a big part of the recovery for Florida has been tourism," said Christopher McCarty, director of the University of Florida Bureau of Economic and Business Research.
McCarty said Orlando is "better positioned" than other areas of the state to weather another downturn because of tourism and impending health care-related jobs.
The scariest of the current economic indicators, however, is the dismal level of Consumer Sentiment.
McCarty, who measures Floridian's confidence every month, said the numbers are already in what would historically be considered recession territory. From June to July, confidence ticked up slightly from 67 to 69.
He expects the number for August to take another drop, setting the stage, perhaps, for an economic scenario similar to the double-dip experienced when the economy fell into a recession for seven months in 1980 and then again from 1981-82.
"Things like this have happened before, and we've had booms since then," McCarty said.
Summer is nearly over, school supply lists are out and Florida's sales tax holiday runs Friday through Sunday, giving all shoppers a break from the 6.5 percent added to store receipts.
That break is limited, but the limits have been raised this year: clothing that costs $75 or less, up from $50 last year; and school supplies up to $15, up from $10. Books, however, have been removed from tax-exempt status.
Parents have the lists for school uniforms or acceptable fare and classroom supplies: khakis, cleats, pencils, notebooks, hand sanitizer, pair of ear buds. Even without the tax holiday, the back-to-school season is lucrative for retailers.
However, while the tax holiday concentrates on school shoppers, it also brings out people who just want a tax break. And retailers add on the deals and promotions, says Florida Retail Federation President and CEO Rick McAllister.
"No questions, looking at revenue numbers, the back-to-school holiday does have a stimulus effect on what is already a good shopping period in Florida," he said.
Retailers bank on the idea that people put non-tax-exempt items in their shopping baskets, too, and the numbers support that, McAllister said.
The National Retail Federation is predicting people nationwide will spend nearly $70 billion on back-to-school purchases. And Florida consumers in July showed a slight uptick in their outlook on spending money, according to the Florida Consumer Sentiment Index tracked each month by the University of Florida Bureau of Economic and Business Research.
"Most of the increase can be attributed to an increase in optimism about whether it is a good time to buy. This component is now back to the level it was last fall," said BEBR's Chris McCarty. "Some of this may have to do with declines in gas prices during the month of June and much of July. This leaves more money in people's budget for other purchases."
In a new report, members of the Bureau of Economic and Business Research (BEBR) Population Program at the University of Florida investigate the accuracy of several sets of state and county population projections published by BEBR over the last 30 years.
The BEBR Population Program, under contract with the Florida Legislature, has been making three sets of population projections (low, medium, and high) for Florida and its counties for many years. Many decisions in both the public and private sectors are based on expectations of future population change. Planning for schools, hospitals, shopping centers, housing developments, electric power plants, and many other projects is strongly influenced by expected population growth or decline. The distribution of government funds and the granting of various types of licenses and permits may be affected as well. Given their many uses, it is essential to evaluate the accuracy of these projections.