Florida’s Labor Market Continues Cooling Down at a Slow Rate

The Covid-19 pandemic has brought many changes in the labor market over the past three years. Florida TaxWatch has been studying these changes in the labor market and the effects those changes have had on both the national economy and the Florida economy this past year. The Florida TaxWatch commentary of November 2023 shows a continuous slow-down in the labor market. The labor market slow down has been faster at the national level than in Florida.1

A U.S. Bureau of Labor Statistics (BLS) release of the “Job Openings and Labor Turnover Summary – December 2023” (JOLTS) showed that nationwide the number of job openings was 9.0 million and the rate of job openings was 5.4 percent.2 This is down from the 9.6 million in August 2023 and 12.0 million in March 2022. A decrease in the number of job openings represents a cooling down of the labor market. The nation experienced a steady unemployment rate of 3.7 percent for the third consecutive month in December 2023, indicating an expanding labor market despite high interest rates.3 This ultimately affects the rising inflation seen nationwide in the past year as well.

While the national unemployment rate was 3.7 percent, Florida’s unemployment rate was lower at 2.9 percent in December 2023. Over the span, from December 2022 to
December 2023, Florida’s labor market gained a total of 240,600 people employed.4 Of the ten major industries in Florida, nine saw job gains, with the information sector being the only sector with a decrease in jobs. The number of job openings shows labor market heat. Over the year, the number of jobs in Florida increased; however, it did so at a decreasing rate, which shows a cooling down in the long term.

The rate of job openings in August 2023 was 5.9 percent, which decreased to 5.0 percent in December 2023, showing a slow-down in Florida.5 The ratio of unemployed persons per job opening in Florida shifted towards 1.0, from 0.4 in June 2023 to 0.6 in October 2023, which further shows a cooling down in the labor market.6 While this ratio shows improvement, it is still far from a balanced labor market, meaning that inflation in Florida may not decrease in the near future.

Despite a slow cool-down, the job market remains relatively hot compared to market analysts’ expectations, both nationally and in Florida. There are still 1.5 jobs for every unemployed person nationally. This comes as a surprise to many market analysts because the Federal Reserve’s continuous efforts to slow the economy with a steady interest rate of 5.5 percent these last six months was expected to have a greater impact on the job market.7

As the Florida economy and national economy continue to show slow signs of cooling down, the fear of an impending recession has now disappeared for most market experts. However, this still leaves the possibility of steady or higher inflation. Consumers saw a plunge in inflation expectations to 3.1 percent in December 2023, down from 4.5 percent in November.8 As a result, if the Federal Reserve cuts rates in April 2024, for the first time since March 2022, this may result in higher inflation expectations for the year.