Report: Economy won’t bounce back until 2021
Florida’s businesses remain closed and restricted as COVID-19 lingers on
Florida’s job market and economy are not likely to return to full strength until late 2021, as businesses remain shuttered or restricted to stop the coronavirus, according to a forecast by a University of Central Florida economist.
“It’s the public health measures and the lingering fears that are weighing on the recovery,” said Sean Snaith, director of the Institute for Economic Forecasting at the University of Central Florida. “Businesses are not going back to the levels of staffing prepandemic. If they survive the shutdowns, they are no doubt extra cautious about managing costs and are proceeding quite slowly.”
Among the key conclusions of his outlook:
Payroll job losses in Florida between the first quarter of 2020 and the fourth quarter of 2020 will total nearly 767,000.
The state’s unemployment rate will remain over 10% through the fourth quarter of 2020, falling to 7.6% in 2021 and 3.9% in 2022. In June, it was 10.3%.
Florida’s economy, as measured by Real Gross State Product — the sum of the value of production from all industries statewide — will not reach prepandemic levels until the third quarter of 2021. It will contract by 5.2% this year and ultimately grow by 6.7%.
New passenger car and truck registration will have
fallen by more than 580,000 during the first half of 2020.
■ Retail sales will have plunged by a quarterly average of $38.4 billion during the first half of 2020.
Florida jobless claims fall, but still high
The UCF report comes as laid-off and furloughed workers in Florida filed another dose of six-figure unemployment claims with the state’s Department of Economic Opportunity for the week ended July 18.
But for the latest reporting period, they declined by 27,421 to 105,410, after spiking by 62,467 to 129,408 the week before, according to the U.S. Department of Labor. The decline was steeper than any other state.
Nationally, claims rose to more than 1.4 million, an increase of 109,000. But Georgia, Texas and Washington — which also have been coping with spikes in COVID-19 cases — each recorded five-figure declines in jobless filings. California recorded an increase of more than 7,000.
“This is clearly very disappointing news to see new weekly unemployment claims rise over the previous week to 1.4 million,” said Mark Hamrick, senior economic analyst at Bankrate. “The increase marks an end to the 15-week string of declining new claims. New claims have remained elevated, or above 1 million, for 18 straight weeks going back to late March. At the same time, it is not entirely surprising given the severe extent of the continuing outbreak. “
Through early this week, Florida has paid nearly 1.8 million people slightly more than $11 billion in benefits since March 15. But $8 billion of that amount has come from the Federal Pandemic Unemployment Compensation program which funded the $600 weekly payments that are about to expire.
Republicans in Washington continued to debate the renewal or modification of federally funded unemployment benefits that are scheduled to expire Saturday in Florida and other states. As part of a proposed $1 trillion relief act being discussed by the GOP and the White House, a $600 weekly payment in place since April would be reduced and pegged to a scale based on a worker’s previous income, according to reports. Democrats, who have passed a $3 trillion relief plan in the House, want to extend the payment through the end of next January.
More uncertainty, more layoffs
Various companies are hiring or recalling workers in South Florida and elsewhere around the state. The Aventura Mall, for example, announced five new retailers and restaurants are opening in August, but did not have any hiring figures. The Duffy’s Sports Grill chain is reopening three South Florida restaurants as it continues to reactivate most of its locations. And Walmart is on a hiring blitz in Florida, according to job applicants.
But layoffs and extended furloughs continue to plague workers employed by hotels, restaurants, retailers and transportation companies. As a group, those businesses have been hardest hit by the lockdowns and restrictions that have kept many consumers at home.
Paradies Broward, a concessionaire operating at Fort Lauderdale-Hollywood International Airport, notified the state that the temporary layoffs of 74 workers imposed in March “may last longer than six months.” Paradies, which does business at more than 100 airports, sidelined them after business at the airport “slowed to a fraction” of its typical traffic before the pandemic.
And early this week, Spirit Airlines of Miramar reportedly warned its employees in an internal memo that furloughs could be in the offing if passenger traffic continued to deteriorate. The company, though, is prohibited from taking any action until Oct. 1 as part of the terms of a payroll assistance package it received from the federal government.
Late Wednesday, the company reported a $144 million net loss for its second quarter after revenue plunged by 86% year over year. Management has said that on top of the $335 million aid package it received from the government, it has applied for another $741 million loan from the U.S. Treasury Department.