D.C. "Zombies" Gnawing Away at Economic Recovery
Elected officials in the nation’s capital are acting like zombies taking bites out of the national economic recovery, and infecting Florida in the process.
In his final state economic forecast for 2013, University of Central Florida economist Sean Snaith, revised the positive economic growth trend for the Sunshine State because of the “antics in D.C.”
“The situation in Washington, D.C. is looking more and more like a movie that is a hybrid of Night of the Living Dead and Groundhog Day,” thanks to putting off the debt-ceiling decision until January 2014, Snaith said. “If the federal government could function as a living entity instead of a collection of the undead we could address the serious short- and long-term fiscal and economic challenges we face.”
From the sequester to the government shutdown to the debt-ceiling impasse to the calamitous and piecemeal rollout of the Affordable Care Act, policy action and inaction are draining momentum from the economic and labor-market recoveries by usurping stimulus and prolonging and intensifying a fog of policy-related uncertainty that is as thick and chilling as any you might find in a George Romero movie, Snaith added.
“Florida’s economy does not operate in a vacuum and it is impacted by the weakening economic environment unleashed by the undead in D.C.,” Snaith said. “The path of Florida’s economic and labor-market recovery have been revised downward in this quarter’s forecast not in response to anything that is happening in the state, but by the state of the national economy, which has floundered in the second half of 2013.”
Snaith says dangers still lurk for the economy, such as the uncertainty of how the Affordable Care Act will be implemented and how the debt-ceiling crisis will be resolved in the New Year. But despite a downward revision in his forecast, Snaith said the economic recovery is continuing in Florida with several bright spots.
For the complete October 2013 Florida Forecast click here.
Highlights from report include:
- Housing finance remains constrained. As of September, 41.8 percent of single-family transactions are cash sales. A normalized housing market would have that percentage at around 10 percent.
- Payroll job growth year-over-year should average 2 percent in 2013, 2.2 percent in 2014, 2 percent in 2015, and 1.9 percent in 2016. It will be the 4th quarter of 2016 before payrolls recover to their pre-recession levels.
- The sectors expected to have the strongest average growth during 2013-2016 are construction (9.2 percent); professional and business services (3.4 percent); trade, transportation and utilities (2.6 percent); education and health services (2.1 percent); and leisure and hospitality (1.8 percent).
- Real personal-income growth for 2012 slowed to 1.4 percent. From 2013-2016, real personal-income growth will average 3.1 percent, with 2013 growth of 1.7 percent that will accelerate to 3.8 percent in 2014.
- Unemployment rates have fallen from their peaks, in part due to a low labor force participation rate (59.8 percent in August 2013), and they will continue to decline through 2016. The pace of decline will moderate as labor force growth picks up; despite this headwind the unemployment rate should hit 6.4 percent in the second half of 2016.
Snaith is the director of UCF’s Institute for Economic Competitiveness. He is a national expert in economics, forecasting, market sizing and economic analysis who authors quarterly reports about the state of the economy. Bloomberg News has named Snaith as one of the country’s most accurate forecasters for his predictions about the Federal Reserve’s benchmark interest rate, the Federal Funds rate.
Snaith also is a member of several national forecasting panels, including The Wall Street Journal Economic Forecasting Survey, CNNMoney.com’s survey of leading economists, the Associated Press Economy Survey, the National Association of Business Economics Quarterly Outlook Survey Panel, the Federal Reserve Bank of Philadelphia’s Survey of Professional Forecasters, the Livingston Survey, Bloomberg U.S. Economic Indicator Survey, Reuters U.S. Economy Survey and USA Today Economic Survey Panel.
The Institute for Economic Competitiveness strives to provide complete, accurate and timely national, state and regional forecasts and economic analyses. Through these analyses, the institute provides valuable resources to the public and private sectors for informed decision-making.