The Sunshine State is on the cusp of a recession 鈥� if it hasn鈥檛 already started 鈥� says prominent 麻豆原创 economist Sean Snaith. Fortunately, the impact won鈥檛 be anything like Floridians saw in 2020 or the housing collapse of the late 2000s.
鈥淔lorida can鈥檛 escape a recession,鈥� says Snaith, the director of 麻豆原创鈥檚 Institute for Economic Forecasting. 鈥淏ut we won鈥檛 suffer like we did during the previous two. If Florida鈥檚 economy had been a hospital patient during 2020 or in 2008-09, its condition would have been somewhere between serious and critical. This time around, it will be good or stable 鈥� and probably even closer to good.鈥�
In his , released this morning, Snaith predicts the recession may even yield some relief for residents and businesses, such as an end to the rapid rise in housing costs and alleviating supply chain woes on everything from automobiles to appliances.
One benefit we鈥檙e already seeing, Snaith says, is a decline in oil and gas prices, which when coupled with sky-high housing and food prices have been a severe strain on Floridians鈥� budgets.
The 鈥楶asta Bowl Recession鈥� and Inflation
Even don鈥檛 preclude an economic slowdown, Snaith says.
While Florida鈥檚 already-strong labor market is poised to strengthen in light of the latest U.S. employment report, Snaith continues to predict his which he defines as a shallow slide into鈥攁nd eventually a gradual climb out of 鈥� a recession. (Think back to Snaith鈥檚 2009 , but this time wider with flatter curves.)
This new tableware-shaped recession will actually help the Federal Reserve in its fight to bring down inflation.
鈥淚t means the Fed will not have to raise interest rates as high as they otherwise would if the economy was still growing at the pace that it was in 2020 and 2021 when inflationary pressures were much stronger,鈥� Snaith says. 鈥淭he result is that the trade-off we would typically see between lower inflation and higher unemployment rates won鈥檛 be as large as it historically has.鈥�
Some additional highlights from Snaith鈥檚 latest four-year Florida forecast include:
- The impact of the 鈥淧asta Bowl Recession鈥� in Florida will continue to slowly manifest as 2023 progresses. There will not be large payroll job losses or very high unemployment rates as in the previous two recessions, but this mild recession will impact the labor market starting in 2023 and continuing into 2024.
- From 2023-26, Florida鈥檚 economy, as measured by Real Gross State Product, will expand at an average annual rate of just 0.6%. However, Real Personal Income Growth will average 2% during 2023-26, and Florida鈥檚 average growth will be 0.3 percentage points higher than the national rate over the next four years.
- Labor force growth in Florida will average 0.8% from 2023-26. After growing 3% in 2022, Florida鈥檚 labor force growth will decelerate because of the recession in 2023-24, then accelerate in the final two years of our forecast.
- Florida鈥檚 unemployment rate fell to 4.6% in 2021 and then to 2.9% in 2022. The recession will push up the rate to 4.6% in 2023 and to 5.8% in 2024 before easing slightly to 5.4% in 2025 and 5% in 2026.
