The pace of Florida home construction is more than a positive trend for Florida real estate agents, according to a report from Florida TaxWatch. Housing starts, as a leading economic indicator, provide evidence that Florida is rebounding from the Great Recession.
"Floridians are seeing evidence of economic recovery in every corner," says Dominic M. Calabro, President and CEO of Florida TaxWatch. "New construction demand is growing, job creation is up, and for the first time since the recession, the state has a budget surplus and is sharing large tax cuts with hardworking Floridians. These positive indicators are giving taxpayers confidence, allowing them to spend more and generating state revenues."
The TaxWatch report finds that Florida averages more than 4,600 new private single housing starts each month – more than double the monthly averages in early 2009. Furthermore, future housing start projections are expected to double by 2016 for single-family homes, while multi-family new construction should double by 2017.
Positive housing starts also have a ripple effect on the state economy. They provide construction jobs and contribute to the growth of other sectors, such as housing services, home improvement stores and other retailers, along with Realtors and title companies.
"Increased investment by individuals and companies helps increase Florida's growth rate, giving businesses confidence to hire more workers," says Jerry D. Parrish, Ph.D., Florida TaxWatch chief economist. "This is one more positive sign of the growing momentum in Florida's economy."
The full TaxWatch economic commentary can be read online.
© 2014 Florida Realtors®
The U.S. economy slowed drastically in the first three months of the year as a harsh winter exacted a toll on business activity. The slowdown, while worse than expected, is likely to be temporary as growth rebounds with warmer weather.
Growth slowed to a barely discernible 0.1 percent annual rate in the January-March quarter, the Commerce Department said Wednesday. That was the weakest pace since the end of 2012 and was down from a 2.6 percent rate in the previous quarter.
Many economists said the government's first estimate of growth in the January-March quarter was skewed by weak figures early in the quarter. They noted that several sectors – from retail sales to manufacturing output – rebounded in March. That strength should provide momentum for the rest of the year.
And on Friday, economists expect the government to report a solid 200,000-plus job gain for April.
"While quarter one was weak, many measures of sentiment and output improved in March and April, suggesting that the quarter ended better than it began," said Dan Greenhaus, chief investment strategist at global financial services firm BTIG.
Still, the anemic growth last quarter is surely a topic for discussion at the Federal Reserve's latest policy meeting, which ends Wednesday afternoon. No major changes are expected in a statement the Fed will release. But it will likely announce a fourth reduction in its monthly bond purchases because of the gains the economy has been making. The Fed's bond purchases have been intended to keep long-term loan rates low.
In its report Wednesday, the government said consumer spending grew at a 3 percent annual rate last quarter. But that gain was dominated by a 4.4 percent rise in spending on services, reflecting higher utility bills. Spending on goods barely rose. Also dampening growth were a drop in business investment, a rise in the trade deficit and a fall in housing construction.
The scant 0.1 percent growth rate in the gross domestic product, the country's total output of goods and services, was well below the 1.1 percent rise economists had predicted. The last time a quarterly growth rate was so slow was in the final three months of 2012, when it was also 0.1 percent.
Ian Shepherdson, chief economist at Pantheon Macroeconomics, said he expects the economy's growth to rebound to a 3 percent annual rate in the current April-June quarter. Other economists have made similar forecasts.
A variety of factors held back first-quarter growth. Business investment fell at a 2.1 percent rate, with spending on equipment plunging at a 5.5 percent annual rate. Residential construction fell at a 5.7 percent rate. Housing was hit by winter weather and by other factors such as higher home prices and a shortage of available houses.
A widening of the trade deficit, thanks to a sharp fall in exports, shaved growth by 0.8 percentage point in the first quarter. Businesses also slowed their restocking, with a slowdown in inventory rebuilding reducing growth by nearly 0.6 percentage point.
Also holding back growth: A cutback in spending by state and local governments. That pullback offset a rebound in federal activity after the 16-day partial government shutdown last year.
Economists say most of the factors that held back growth in the first quarter have already begun to reverse. Most expect a strong rebound in growth in the April-June quarter.
Analysts say the stronger growth will endure through the rest of the year as the economy derives help from improved job growth, rising consumer spending and a rebound in business investment.
In fact, many analysts believe 2014 will be the year the recovery from the Great Recession finally achieves the robust growth that's needed to accelerate hiring and reduce still-high unemployment. Many analysts think annual economic growth will remain around 3 percent for the rest of the year.
If that proves accurate, the economy will have produced the fastest annual expansion in the gross domestic product, the broadest gauge of the economy's health, in nine years. The last time growth was so strong was in 2005, when GDP grew 3.4 percent, two years before the nation fell into the worst recession since the 1930s.
A group of economists surveyed this month by The Associated Press said they expected unemployment to fall to 6.2 percent by the end of this year from 6.7 percent in March.
One reason for the optimism is that a drag on growth last year from higher taxes and deep federal spending cuts has been diminishing. A congressional budget truce has also lifted any imminent threat of another government shutdown. As a result, businesses may find it easier to commit to investments to modernize and expand production facilities and boost hiring.
State and local governments, which have benefited from a rebound in tax revenue, are hiring again as well.
Joel Naroff, chief economist at Naroff Economic Advisors, said he expects job growth to average above 200,000 a month for the rest of the year – starting with the April jobs report, which will be released Friday.
"Those are the types of job gains which will generate incomes and consumer confidence going forward," Naroff said.
Copyright © 2014 The Associated Press
Floridians' consumer sentiment remained steady in April, declining one point to 79, according to a new University of Florida (UF) survey.
"The overall consumer sentiment index is remaining relatively flat given the lack of significant economic news," says Chris McCarty, director of UF's Survey Research Center in the Bureau of Economic and Business Research. "Here in Florida, the economy remains on a steady path without any big changes either negative or positive."
Three of the five components making up the index decreased, and two increased.
Respondents' overall opinion that they are financially more secure than a year ago fell three points to 69 from a post-recession high in March. Their expectations of improved personal finances a year from now also fell, dropping six points to 77; and overall confidence in U.S. economic conditions over the next year dropped five points to 77.
However, expectations that the nation's economy will do better over the next five years rose five points to 82.
Finally, the component measuring whether the present is a good time to buy a big-ticket item, such as a car, increased three points to 89.
Florida's unruffled consumer sentiment, however, is five points lower than the national level of 84, and McCarty suggests that concern over employment may help explain why. Last month, Florida's unemployment rate ticked up one-tenth of a percent to 6.3 percent – but that might not be bad news, McCarty says.
"A typical pattern after most recessions is for unemployment to temporarily increase as previously discouraged workers see more job availability and reenter the labor force," he says. "There is no doubt that Florida lost workers from the labor force. The question is whether they permanently left to take early retirement, or whether they temporarily left for job training or are just biding time until the labor market improves."
Florida's labor force also got bigger.
"While it is too early to tell, this increase could signal improvements ahead in Florida's job market, at least for those workers having a job, even if the wages for those jobs are lower than they were prior to the recession," McCarty says.
Housing continued to improve in March with the median price for a single-family home rising to $173,000, a level not achieved since last August.
Floridians can expect consumer confidence to remain in the upper 70s to low 80s, given the dearth of significant economic news, McCarty predicts. However, international developments, such as the conflict between Ukraine and Russia, and a continuing decline in the growth of the Chinese economy could darken consumers' mood.
Conducted April 1-24, the UF study reflects the responses of 402 individuals, representing a demographic cross-section of Florida. It's benchmarked to 1966, which means a value of 100 represents the same level of confidence for that year. The lowest index possible is a 2; the highest is 150.
© 2014 Florida Realtors®
The U.S. economy added 288,000 jobs in April, taking the unemployment rate to 6.3 percent, the lowest it has been since September 2008.
Americans gained the most jobs and at the fastest pace in the last two years, with April being the best month of job creation since January 2012 and the second best since mid-2009, after the economy emerged from the recession.
Economists polled by Bloomberg had estimated a 218,000 increase in non-farm payrolls, with the unemployment falling only 0.1 percent to 6.6 percent. April's numbers were far better than estimates, suggesting the economy was moving out of its winter rut.
The Labor Department also revised the numbers for February and March, and they were higher than previously estimated. The economy added 203,000 jobs in March, up from the 192,000 initially reported and 222,000 in February, up from 197,000.
But the good news was dampened a little by the drop of 806,000 Americans from the labor force, pushing the labor participation rate down sharply. Also, average hourly earning did not rise.
Construction and retail saw strong growth last month, adding 32,000 and 35,000 jobs respectively. Professional and business services added another 75,000 jobs combined, a count closely followed by economists who consider them a barometer for white-collar activity.
The numbers are sure to boost expectations for growth this quarter, with many economists estimating a 3 percent growth in the U.S. economy. Friday's report offers hope for such estimations.
Copyright © 2014 United Press International (UPI), Inc.
