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State unemployment rate holds at 3.8 percent for June

 
Florida's unemployment rate held at 3.8 percent for June, unchanged from May. Pictured is a job fair in 2015. | [DIRK SHADD   |   Times, 2015]
Florida's unemployment rate held at 3.8 percent for June, unchanged from May. Pictured is a job fair in 2015. | [DIRK SHADD | Times, 2015]
Published July 20, 2018

Florida's unemployment rate held at 3.8 percent for June, unchanged from May and down just slightly after resting at 3.9 percent since September 2017.

The Sunshine State added a hefty 14,300 jobs over the month, outpacing the national rate. Nationally, unemployment stood at 4 percent in June.

Tampa Bay's unemployment rate climbed to 3.8 percent in June as the region added 28,900 jobs over the year, second only to Orlando (up 44,100 jobs) among Florida metros.

Here's what economists are paying attention to in the coming months:

1. Wage growth may turn a corner soon.

One of the biggest lingering questions is when the low unemployment will lead to a rise in wages. Typically when there are fewer workers available, employers raise wages to attract prospective hires. But wages have largely stagnated despite the tighter labor market.

That may change soon.

"I think we will see stronger wage growth in the second half of 2018 and 2019 as there is more competition for workers," Gus Faucher, chief economist at PNC Financial Services.

And it won't just be for workers who are switching jobs. Employers are likely to bump up salaries for existing employees to entice them to stay.

"You can't hire someone who's starting at a higher rate than someone who's been there," Faucher said. "It kind of bumps up the line."

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2. The unemployment rate may fall further.

"As the job market continues to tighten, I would expect the unemployment rate is going to move a little lower in the next six or nine months or so," Faucher said.

Then, look for a rise. Faucher expects the unemployment rate to even out again between 4 percent and 4.5 percent.

The only tricky part, he said, will be whether the economy can inch up to that range without going significantly over it.

"It's an open question whether we can achieve a soft landing," Faucher said.

3. Leisure and hospitality has bounced back from Hurricane Irma.

Leisure and hospitality made the largest gains of any industry last month, adding 5,600 jobs over the month and 41,700 jobs over the year.

While job growth in the summer is typical for the sector, recent gains are fueled in part by getting out of the September 2017 storm's shadow.

"Irma actually produced more of a hangover than most hurricanes do in Florida," Mark Vitner, senior economist at Wells Fargo, said. "Typically when we have a storm, employment comes roaring back. In this instance, we had a lot of resorts that had to be refurbished, and they ended up missing the winter months."

4. Financial services is a soft spot in Florida's economic growth.

Traditionally, Vitner said, financial services firms locate their back-office operations in Florida. But rising fees associated with financial services, as well as a slowdown in mortgage refinancing, is causing firms to cut costs where they can.

"What we're seeing in financial services is increased automation in many areas," he said.

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Contact this reporter at mcarollo@tampabay.com or (727) 892-2249. Follow @malenacarollo.