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Q&A Of The Day – Is Florida’s Economy Really Better Than Before The Pandemic?
Each day I feature a listener question sent by one of these methods.
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Today’s entry: If Florida’s unemployment rate is still higher than before the pandemic, how can Florida’s economy be better?
Bottom Line: Today’s note is on back of the story I shared with you yesterday highlighting the most recent edition of the CNN & Moody’s Analytics Back-to-Normal Index. The index, which provides a weekly update on every state’s economy, showed something remarkable this week. Two states now have economies that haven’t just recovered to where they were prior to the pandemic, they’ve exceeded where their economies were prior to the pandemic. Those two states, North Dakota and Florida. Florida’s economy is now at 101%, or 1%, stronger than it was in February of 2020. This compares to a national average of 91%. In other words, Florida’s economy is 11% better than the national average and 32% better than New York’s - the state with the weakest economy. Now to answer your question... How can Florida’s economy be better off today than prior to the pandemic if unemployment is higher?
There are 37 total economic metrics used by Moody’s in calculating these results. Seven are specific to the individual state. Clearly employment rates are important but they’re far from the only barometer of an economy’s overall performance. But even within Florida’s employment picture there’s a good storyline compared to the 1st quarter of 2020. Florida’s unemployment rate was a record low of 2.8% in February of 2020 – just prior to the impact of the pandemic. Most recently the rate stood at 4.8% (when we get the rate later this month for May – it's certain to drop from that level). But while Florida’s unemployment rate is higher than prior to the pandemic, earnings aren’t.
Florida’s current average hourly wage is $28.99. In February of 2020 the average wage was $27.93. So while the unemployment rate is 2% higher, average earnings are 4% higher. The increase in earnings has the potential to compensate for the decrease in employment. This is why it’s been key that salaries didn’t collapse during the pandemic induced recession, a la what happened during the Great Recession of a decade ago. Additionally, it’s clear that as people have begun to meaningfully travel once again, starting with Memorial Day weekend, Florida’s at the top of the list of where people are going. It’s probably not a coincidence that this week, after the effects of Memorial Day travel, was the week we exceeded prepandemic economic conditions.
It is remarkable in context, especially when you consider a key industry like the cruise industry, isn’t even operational. That provides an additional view of the possible for Florida’s economy once it’s fully up and running again.