Local jobless rate falls below 5% -- first time since '08
Published: Friday, May 17, 2013 at 6:33 p.m.
Last Modified: Friday, May 17, 2013 at 6:33 p.m.
With Gainesville unemployment dropping below 5 percent in April, the local labor market is exceeding the federal standards for full employment.
The jobless rate fell to 4.9 percent in April in the Gainesville Metropolitan Statistical Area, consisting of Alachua and Gilchrist counties. That is down from 5.2 percent in March and 6.3 percent in April 2012.
Florida's unemployment rate dropped to 7.2 percent in April from 7.5 percent in March and 8.9 percent a year ago. April marked the second consecutive month Florida's rate was lower than the U.S. rate. U.S. unemployment was 7.5 percent in April and 7.6 percent in March.
Gainesville unemployment dropped below 5 percent for the first time since October 2008, when it was 4.8 percent.
April marks the second consecutive month Gainesville's jobless rate has been lower than the federal standard for full employment, currently estimated by the Congressional Budget Office at between 5.5 percent and 6 percent unemployment.
Full employment corresponds to a stable rate of inflation and fluctuates based on other factors that include worker productivity, oil prices, and wage and price controls, according to the CBO.
While U.S. unemployment below the full employment rate typically increases wage inflation, that trend has not necessarily played out in the local microeconomy.
Median weekly earnings for full-time workers in Alachua County was virtually flat in the first quarter of this year at $773 compared with the fourth quarter of 2012 when it was $775.
From boom to bust, the unemployment rate rose from a low of 2.3 percent in April 2006 to 8.7 percent in July 2010, while weekly wages still rose during that time from $659 to $740.
University of Florida economist David Denslow said that Gainesville's unemployment is on average substantially below the national rate without creating inflationary pressures as a result of stable employment from the medical industry and the university.
Gainesville also has a lot of college students who either get a job, or are not looking for a job, which keeps them from adding to the unemployment rate, as well as a lot of college graduates who have lower rates of unemployment, he said.
"There could be a few specialties that are in great demand where there can be wage pressures, but in Gainesville an unemployment rate around 5 percent is actually something that is higher than usual for us," Denslow said.
Estimates from employer surveys showed that Gainesville gained 2,800 jobs between April 2012 and April 2013, a growth rate of 2.2 percent. All private-sector categories saw job gains or were flat over the year while the public sector lost 900 jobs, with 300 each in local, state and federal government.
The medical field saw the largest job growth with 1,200 new jobs in the private education and health services category, followed by 800 in leisure and hospitality and 600 in professional and business services.
Chris Fortner, president of Suwannee Medical Personnel, said his firm is seeing a slight uptick in orders for temporary medical staff that correlates to the decrease in unemployment.
Construction was the fastest growing field, with 10 percent growth, or 400 new jobs in the mining, logging and construction category.
There is no shortage of construction labor to drive up wages since the residential housing recovery is slow, said Kara Bolton, president of the Builders Association of North Central Florida.
She said the mechanical trades such as heating and air, plumbing and electrical are hiring for the first time in a long time.
"There are now jobs opening up in residential, and there's a handful of tradesmen who have been hired," she said.