Florida's high jobless rate may last till 2018, forecast says

If you're hoping Florida's job market will return to its heyday, don't hold your breath: Relatively high unemployment could linger until 2018, state economists predict.

Florida's jobless rate was 10.7 percent in July, the highest since October 1975. It could peak at about 11 percent some time next year, said Rebecca Rust, economist for the Florida Agency for Workforce Innovation.

The good news is the state's economy should finally grow by the second quarter of next year, Rust said, but the recession's sting could be felt for several more years in the labor market. Last month, a report by Florida's Office of Economic and Demographic Research issued a forecast of the state's unemployment rate through 2019.

The unemployment rate should peak at 10.9 percent early in 2010 and decline steadily for the rest of the decade. For example, in fiscal year 2012 the jobless rate should fall to 9.9 percent. It should later fall to 9.1 percent by 2013, to 8.3 percent by 2014 and to 7.6 percent in 2015.

Falling unemployment will be encouraging, but it still means many more people will be out of work than in the 2006-2007, when just 3.6 percent of Floridians were unemployed. Rust said the unemployment rate may not dip below 6 percent until 2018.

This wouldn't be the first time Florida's job market has rebounded slowly. The state's economy plummeted steeply during the recession of 1974-1975 and the unemployment rate was above 6 percent until 1980, Rust said.

Things may take even longer this time because of Florida's housing collapse and a cutback on lending, two problems that weren't as prevalent before, she said.

Not every economist shares this pessimistic forecast.

David Denslow, economist with the University of Florida's Bureau of Business and Economic Research, said no one can really predict the unemployment rate nine years from now.

If Florida recovers slowly, the recession may hurt the job market for four more years or so, Denslow said. By 2014, the unemployment rate might drop to its "natural rate," or about 5 percent.

Chris Lafakis, an economist who tracks Florida's economy for Moody's Economy.com, said he thinks the jobless rate in Florida will fall below 6 percent by early 2014.

He expects Florida to rebound slowly from the recession, but it won't be a jobless recovery. Companies have cut staffing to the bone.

"They've laid off workers that they probably will need when the economy recovers," Lafakis said.