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Business Observer Friday, Jun. 5, 2009 11 years ago

Unemployment dip is temporary

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When the state released April unemployment figures recently, many counties on the Gulf Coast reported lower unemployment rates than the previous month.

When the state released April unemployment figures recently, many counties on the Gulf Coast reported lower unemployment rates than the previous month.

The numbers were a bit of a head scratcher because unemployment rates in Florida typically begin their seasonal increase in April as the winter tourism season winds down. What's more, local unemployment rates weren't following the national trend higher.

But don't take those numbers as a sign of recovery in the Gulf Coast labor market quite yet, says Gary Jackson, director of the Regional Economic Research Institute at Florida Gulf Coast University.

The drop in the unemployment rate was due to a decline in the number of people reported as unemployed. The drop can be due to discouraged workers who have left the workforce and aren't actively looking for jobs or to unemployed workers who have left the area to seek work elsewhere.

That hypothesis is reinforced by the fact that employment hasn't grown. For example, Lee County's unemployment rate fell from 12.3% in March to 11.9% in April, but employment fell 0.7%.
Jackson expects the unemployment rate to continue to rise, despite early indications in housing and the stock market that the economy is stabilizing. “I think it's going to be several years out when we get back to normal,” he says. A more normal, long-term unemployment rate is about 5% to 6%.

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