Tracking the Local Economy: Our Area is Lagging National Trends

The second to last jobs report of 2010 indicates that unemployment continues to be a problem in Leon County and in Florida. The unemployment rate for Leon County increased from 7.8% in October to 8.7% in November. We started the year with an unemployment rate of 8.5%.

The housing market, while not getting worse, seems to be moving sideways. The housing supply for November was 12.4 months. We started the year with 11.9 months supply of homes. Real estate professionals consider a normal inventory of homes to be 6 months.

The ER Index, the sum of the unemployment rate and the months supply of homes, for Leon County, increased to over 21 based on November data. The ER Index has not been below 19 since December of 2008 and reached a high of 23 in June 2009. Based on previous economic data, a normal ER Index for Leon County would be 9.

As the chart below shows, we are struggling to keep the unemployment rate below 9%. The unemployment rate for Leon County has fluctuated between 7% and 9% since July 2009. The increase this month to 8.7% puts Leon County dangerously close to surpassing 9.0% for the first time during this economic downturn.

Of more concern for our area is the fact that a comparison with national trends indicates that Florida and Leon County are suffering more from the effects of the recession than the rest of the nation.

For example, the US unemployment rate has basically doubled from 4.6% in 2006 to 9.8% in November of this year. However, in Florida the unemployment rates have more than tripled form 3.4% in 2006 to 11.9% in November of this year. This trend is the same for Leon County. Since 2006, Leon County’s unemployment rate has more than tripled from 2.7% to 8.7% in November of 2010.

Traditionally, Leon County has been somewhat isolated from the effects of economic downturns due to state government employment. However, this information should be a signal to local officials that the recovery from the worst recession in 50 years for Leon County will be different than in years past.