Recession recovery slow to come to Florida
Saturday, 30 October 2010
While the U.S. recession has been declared over by the National Bureau of Economic Research, the follow-up recovery period is taking longer than anticipated. Such is the case in Florida, according to numerous economic specialists.
In Florida, the unemployment rate in September was 11.9 per cent, down from a state historical high of 12.3 per cent.
For September, U.S. home sales increased 10 per cent -- but in Florida, home sales decreased 16 per cent as compared with a year ago.
Regarding construction and real estate, Florida has anywhere from 200,000 to 300,000 available empty housing units. This was, and is, due mostly to over-construction and also speculators driving up housing prices.
Reliable Florida unemployment and home sales figures for October have yet to be released. Despite all of the above sub-par statistics, many Florida analysts and economists are optimistic about the state's future economic status. Why?
"The best metric to determine if we're out of the recession is the unemployment rate. Even though it's high, you have to ask yourself a simple question: Are we creating jobs? The answer is yes, because the growth in the number of jobs has been positive over the past three months," said Dr. Henry Fishkind, an Orlando-based economist.
"We're out of the recession but we're not yet completely into the recovery yet," added Fishkind.
"We do believe that we're in a recovery phase, but it's very slow and very gradual," echoed Dr. Amy Baker, chief economist for the Florida Legislature and a member of the state's Office of Economic and Development Research. "Two years should be about the time that the (Florida) economy will normalize."
Fishkind and Baker's remarks seem to contradict statistics, released in mid-September by the U.S. Census Bureau that reported that 14.6 per cent of Floridians are now living in poverty. That is higher than the national poverty rate, which is 14.3 per cent.
If the 14.6-per cent Florida poverty rate is converted into a total number of people, the figure is 2.68 million.
Not every Florida professional who works in the field of economics is as positive as Fishkind and Baker.
"I'm not really confident (that Florida has emerged from the recession)," admitted Bruce Barron, chair for the Florida State Department of Economics. "The unemployment rate figures for the rest of this year will be down because retailers will be hiring temporary workers for the (year-end) holidays. As far as housing and real estate are concerned...well, there are just too many empty (i.e., unowned) houses out there."
Evidence of a desire for Floridians and Americans to understand how and why the so-called "Great Recession," which began in September 2008, occurred can be found in movie theaters.
Such documentaries as "American Casino," "Capitalism: A Love Story," and more recently, "Inside Job" have created conversation among those who have seen the films as to what person, or persons, should be held accountable for their role in helping to start the "Great Recession."
Paying for movie theater tickets is one of the least important things for many of the destitute people who use any of the 27 social services operated by the aid agency Catholic Charities of Central Florida (CCCF).
"We've seen double the amount of people since the recession began. Our six different (food bank) services have served 130,000 people in 2009 and that figure will be higher for 2010. From June, 2008 to June, 2009, we distributed 4,836,928 pounds of food to the needy," Brenda Loyal, marketing and public relations director for the CCCF, told Xinhua.
Other social services offered by the CCCF to the poor are, according to Loyal, emergency financial assistance for paying for utilities, and free medical clinics. Almost five per cent of all Americans who are working at jobs that pay minimum wage are living in Florida.
In an e-mail interview, Rebecca Rust, an economist for the state organization Agency for Workforce Innovation, wrote that "According to the Florida Economic Estimate Conference (7/20/2010), the first quarter 2011 unemployment rate will be 11.6 per cent."
Rust also noted that this same conference reported that "sales of single family homes will begin to improve in 2011 with quarterly increases."
Regarding real estate, Jack McCabe, a Deerfield Beach, Fl. analyst, noted that with previous national real estate problems "they started in California and moved east. In the case of the 'Great Recession,' they started here in Florida and moved westward. We're looking at the rest of 2010 and probably all of 2011 before the Florida real estate market bounces out of recession."
McCabe explained that "banks are holding so many 'toxic loans' now that it will take months before we go through (i.e., banks process) all of the foreclosures. The real estate speculators drove up the prices quickly. In Fort Myers, 'toxic loans' went up 50 per cent in one year and there was no cognitive reason for it. It was all due to speculation."
"Toxic loans" are, as defined by the web site www.ehow.com, not having "sufficient collateral to meet the outstanding debt obligation when the borrower defaults. The lender is left with a large loss on the balance sheet and no way to recover the debt."
McCabe is another analyst who sees evidence that the Florida real estate market is slowly emerging from the recession. Specifically, he discussed the fact that the international market in buying condominium and housing units in Miami has increased 60 per cent in two years.
"Many of these owners are Canadians or Latin Americans. They are renting out these units at lower prices than previous owners. Many of these units are as low as 70 per cent off of the main prices. These owners are long term investors with reasonable expectations," McCabe stated.
— Xinhua
In Florida, the unemployment rate in September was 11.9 per cent, down from a state historical high of 12.3 per cent.
For September, U.S. home sales increased 10 per cent -- but in Florida, home sales decreased 16 per cent as compared with a year ago.
Regarding construction and real estate, Florida has anywhere from 200,000 to 300,000 available empty housing units. This was, and is, due mostly to over-construction and also speculators driving up housing prices.
Reliable Florida unemployment and home sales figures for October have yet to be released. Despite all of the above sub-par statistics, many Florida analysts and economists are optimistic about the state's future economic status. Why?
"The best metric to determine if we're out of the recession is the unemployment rate. Even though it's high, you have to ask yourself a simple question: Are we creating jobs? The answer is yes, because the growth in the number of jobs has been positive over the past three months," said Dr. Henry Fishkind, an Orlando-based economist.
"We're out of the recession but we're not yet completely into the recovery yet," added Fishkind.
"We do believe that we're in a recovery phase, but it's very slow and very gradual," echoed Dr. Amy Baker, chief economist for the Florida Legislature and a member of the state's Office of Economic and Development Research. "Two years should be about the time that the (Florida) economy will normalize."
Fishkind and Baker's remarks seem to contradict statistics, released in mid-September by the U.S. Census Bureau that reported that 14.6 per cent of Floridians are now living in poverty. That is higher than the national poverty rate, which is 14.3 per cent.
If the 14.6-per cent Florida poverty rate is converted into a total number of people, the figure is 2.68 million.
Not every Florida professional who works in the field of economics is as positive as Fishkind and Baker.
"I'm not really confident (that Florida has emerged from the recession)," admitted Bruce Barron, chair for the Florida State Department of Economics. "The unemployment rate figures for the rest of this year will be down because retailers will be hiring temporary workers for the (year-end) holidays. As far as housing and real estate are concerned...well, there are just too many empty (i.e., unowned) houses out there."
Evidence of a desire for Floridians and Americans to understand how and why the so-called "Great Recession," which began in September 2008, occurred can be found in movie theaters.
Such documentaries as "American Casino," "Capitalism: A Love Story," and more recently, "Inside Job" have created conversation among those who have seen the films as to what person, or persons, should be held accountable for their role in helping to start the "Great Recession."
Paying for movie theater tickets is one of the least important things for many of the destitute people who use any of the 27 social services operated by the aid agency Catholic Charities of Central Florida (CCCF).
"We've seen double the amount of people since the recession began. Our six different (food bank) services have served 130,000 people in 2009 and that figure will be higher for 2010. From June, 2008 to June, 2009, we distributed 4,836,928 pounds of food to the needy," Brenda Loyal, marketing and public relations director for the CCCF, told Xinhua.
Other social services offered by the CCCF to the poor are, according to Loyal, emergency financial assistance for paying for utilities, and free medical clinics. Almost five per cent of all Americans who are working at jobs that pay minimum wage are living in Florida.
In an e-mail interview, Rebecca Rust, an economist for the state organization Agency for Workforce Innovation, wrote that "According to the Florida Economic Estimate Conference (7/20/2010), the first quarter 2011 unemployment rate will be 11.6 per cent."
Rust also noted that this same conference reported that "sales of single family homes will begin to improve in 2011 with quarterly increases."
Regarding real estate, Jack McCabe, a Deerfield Beach, Fl. analyst, noted that with previous national real estate problems "they started in California and moved east. In the case of the 'Great Recession,' they started here in Florida and moved westward. We're looking at the rest of 2010 and probably all of 2011 before the Florida real estate market bounces out of recession."
McCabe explained that "banks are holding so many 'toxic loans' now that it will take months before we go through (i.e., banks process) all of the foreclosures. The real estate speculators drove up the prices quickly. In Fort Myers, 'toxic loans' went up 50 per cent in one year and there was no cognitive reason for it. It was all due to speculation."
"Toxic loans" are, as defined by the web site www.ehow.com, not having "sufficient collateral to meet the outstanding debt obligation when the borrower defaults. The lender is left with a large loss on the balance sheet and no way to recover the debt."
McCabe is another analyst who sees evidence that the Florida real estate market is slowly emerging from the recession. Specifically, he discussed the fact that the international market in buying condominium and housing units in Miami has increased 60 per cent in two years.
"Many of these owners are Canadians or Latin Americans. They are renting out these units at lower prices than previous owners. Many of these units are as low as 70 per cent off of the main prices. These owners are long term investors with reasonable expectations," McCabe stated.
— Xinhua