News Column

Seasonal Tweaks Smooth Out Florida's Jobless Rate

Aprilo 8, 2013

For more than a year, Florida's statewide unemployment rate has been on a slow but steady decline, falling from 9.2 percent in January 2012 to 7.7 percent last month.

Yet the rates in Metro Orlando have experienced a bouncier ride, ticking up one month, then falling the next.

From November to December the Orlando rate dropped from 7.8 percent to 7.5 percent. Then it rose to 7.7 percent in January before falling to 7.1 percent in February. So what makes our local jobless rate so temperamental?

Economists say it's largely a function of hiring patterns that can quickly shift from month to month.

The statewide unemployment rate accounts for those shifts in seasonal hiring, smoothing out month-to-month volatility. Unemployment rates for the metro areas typically do not.

"If you don't account for that movement, you're not really reflecting the underlying trend in the labor market," said University of Central Florida economist Sean Snaith. The numbers at the metro level are more influenced by "bursts of hiring that ebb and flow."

That is less of an issue with statewide and national figures, the latest of which revealed a disappointing slowdown in job creation.

U.S. numbers released Friday showed an increase of just 88,000 jobs in March, the smallest nationwide gain in more than six months. National unemployment dipped to 7.6 percent -- down from 7.7 percent -- but that's largely because the labor force contracted. The labor-force-participation rate -- a measure of how many people are either working or looking for jobs -- fell to 63.3 percent, the lowest level in more than 30 years.

The Obama administration blamed the weak job growth, in part, on sequestration, the across-the-board budget cuts imposed at the beginning of March. Critics said businesses have been reluctant to expand because they are worried about the costs of the health-care overhaul and Washington's endless battle over the budget and taxes.

In Central Florida, unemployment in the metro area fell from 7.7 percent in January to 7.1 percent in February, according to the most recent report available. But the region is filled with businesses that add and drop employees on a seasonal basis -- everything from agricultural workers in the Apopka area to theme-park attendants at the attractions.

February's dramatic fall likely reflects that seasonal hiring -- businesses gearing up for spring break, for example -- more than some fundamental and dramatic progress in the economy at large.

Universal Orlando, for example, began adding staff in mid-January and continued through the first part of March. Universal spokesman Tom Schroder said the number of people hired -- about 1,400 -- and the time frame under which they were hired were typical for the season. Walt Disney World also added "hundreds" of employees, according to a spokeswoman, some on a seasonal basis, but most in permanent positions.

Snaith said such seasonal shifts can make the local labor landscape seem "more robust or less robust" than it really is.

Another problem? The metro-area reports are drawn from smaller sample sizes, so they're inherently more volatile.

"These monthly reports are kind of like looking through a rearview mirror," Snaith said. "And the mirror can be a little foggy."

But dig through the government data -- as Rollins College economist Bill Seyfried does -- and you can find a more comprehensive view of the region's economic health.

Seyfried points out that the Bureau of Labor Statistics does produce seasonally adjusted unemployed numbers for metro areas, but he said the agency does little to publicize it.

Those seasonally adjusted numbers show Orlando's unemployment rate has, like the state's, steadily declined, falling from 8.4 percent in September to 7.5 percent in January. February's number is not yet available, but Seyfried estimates it may come in at 7.4 percent.

That would be five straight months of decline -- not the pogo-stick pattern reflected in the non-seasonally adjusted numbers.

"It's a nice consistent trend," Seyfried said. "It shows steady improvement, month-to-month, going back six months."

Seyfried and Wells Fargo economist Mark Vitner said that, though the monthly numbers are useful, economists and policymakers focus more on long-term trends.

"Year-to-year figures give you a better sense," Vitner said. "It helps smooth out the ups and downs."

Source: Copyright Orlando Sentinel 2013

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