By Marcia Heroux Pounds, Sun Sentinel, Fort Lauderdale, Fla.
Feb. 9--Florida's unemployment is expected to reach an historic peak, 12.3 percent, by this summer, the state's chief economist said on Monday. The forecast is nearly a half percentage point above the record of 11.9 percent set in May 1975.
While such high unemployment is hardly good news, reaching a peak means the state's more than 1 million jobless workers would have a bit more hope for employment.
The state's unemployment reached 11.8 percent in December. The rate is expected to peak between July and September and then slowly decline through the last quarter of 2010 when it is forecast to fall below 10 percent, according to the Florida Economic Estimating Conference, the group of state experts who meet quarterly to forecast a new rate.
"The peak may come sooner than the summertime," said University of Central Florida economist Sean Snaith. "The first three months of the year will see more layoff activity -- the end of the worsening."
The jobless rate tends to rise as a region comes out of a recession, said Amy Baker, Florida's chief economist. While major layoffs in the state are slowing, the jobless rate swings higher in a recovery because discouraged workers return to the job market, she said.
Snaith said the unemployment rate estimate doesn't include the many workers who have been forced to work part-time because they cannot find full-time jobs. He also sees businesses increasing hours of existing workers instead of making new hires.
This week Congress is considering a jobs bill that includes an extension of federal unemployment benefits. Nearly 1.2 million people will lose benefits in March and 5 million by June without an extension, according to the National Employment Law Project, an advocacy organization for the unemployed. In Florida, more than 100,000 will lose their benefits by March and more than 400,000 by June without an extension.
Florida's economic declines are attributed to its troubled housing market and the global credit crisis. Nationally, the economy is expanding, with output rising at 2.2 percent in the third quarter and 5.7 percent in the fourth.
The jobless rate declined in 36 states in December while it rose 0.3 percent in Florida from November.
The Economic Estimating Conference has been too rosy in some past forecasts. It had projected the state's unemployment to reach 10.2 percent by early 2010, but the jobless rate surpassed that estimate by July 2009. Baker said the credit crisis and radical change in consumers' spending habits caused businesses to further tighten their belts and lay off workers.
Marcia Heroux Pounds can be reached at mpounds@sunsentinel.com or 561-243-6650.
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