Q&A of the Day – How Many Jobs Does Florida Need to Add Monthly & Are We At Risk of a Recession?
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Today’s Entry: Brian, I have a follow up question to something you said in your takeaways today. You said the country didn’t add enough new jobs last month to keep up with population growth. No one else has talked about this. How many jobs need to be added across the country and how many in Florida to keep pace? Also if the US dips into a recession will Florida stay out of it?
Bottom Line: This is a topic I most recently addressed in early September after the monthly unemployment report showed strong jobs growth in August but with a rising unemployment rate. The question I was asked was specific to the number of jobs that needed to lower the unemployment rate. Today’s question is a bit different as we’re talking about the number of jobs needed just to keep pace economically. This is also the first time I’ve been asked about Florida specifically. First here’s the context for what brought about this question in case you missed it in Monday’s takeaways. As mentioned: The headline number of 150,000 jobs added was roughly in line with this month’s ADP Private Sector jobs report but the revisions to the government’s number from last month’s reporting shows just how inflated the previous reporting was. Negative revisions totaling 101,000 jobs which produced a net government jobs number of fewer than 50,000, which is the weakest since pandemic-era lock downs were still crippling the economy. It’s a total that’s also not strong enough to keep up with population growth. So, what is the minimum monthly total of new jobs needed to keep up with the number of new people entering the workforce monthly?
The consensus economist estimates say somewhere between 75,000 to 100,000 new jobs must be created nationally each month for there to not be more unemployed people at the end of the month than there were going into it. As illustrated in my takeaways, when factoring in the significant negative jobs revisions from the Bureau of Labor Statistics’ previous reporting, the net number of new jobs added last month was only 49,000. A total that was the lowest since we’d just begun to exit pandemic era lockdowns. Additionally, and notably as economists and business leaders are attempting to gauge whether the economy is at risk of reentering a recession, October marked the first month since December of 2020 that there weren’t at least enough jobs added in a month to keep pace with the country’s population growth. As for what the number looks like in Florida...
Florida has added 241,200 jobs year-over-year which is an average of 20,100 added per month. Job growth statewide has paced 2.5% year-over-year. Meanwhile, Florida’s population growth has paced 1.9% over the same time. If Florida is maintaining the same rate of population growth currently, as we have previously, the state would need to produce a minimum of 15,276 jobs monthly to keep pace with population growth. Last month Florida added 16,200 jobs which was close to a thousand more than is needed to keep pace with the demand of our population growth. The strength of Florida’s job growth will be important should the US economy continue to weaken. Currently economists are estimating a 56% probability of entering a recession next year. Watching the monthly jobs numbers is a forward-looking indicator and key indication of how we’re performing relative to the rest of the country. It’s a bit of an oversimplification, but generally it will hold true, that if we’re adding enough jobs to at least keep pace with the needs of Floridians, we’ll remain out of a recession locally if even there’s one that plays out nationally. Economists broadly see that being the case.
According to the Florida Department of Economic and Demographic Research, they see Florida’s economy growing at about a 1.4% rate during the calendar year next year. On the lower end of the projection spectrum The University of Central Florida’s Economic Forecasting Director Sean Snaith predicts 0.5% economic growth for our state next year. Quoting Snaith: Florida’s economy today is more like Teflon. A lot of the effects of a national slowdown will just slide right off. A recession is never good news but compared to what our state went through during the past two recessions, any pain we endure will be far less severe and won’t linger as long. And Florida’s economy won’t experience the worst from a national economic slowdown.
Snaith’s sentiment is about as much as you could hope for. Florida’s economy has easily and consistently outperformed the national economy since the onset of the pandemic. Hopefully that remains the case regardless of what happens economically around us over the next year.