Florida & Metro Economic Forecast: Pasta Bowl Recession Heads To Florida

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The U.S. economy is heading into a bowl-of-pasta recession, and Florida can expect to follow suit with a year-long shallow recession, says Sean Snaith, national economist and director of the Institute for UCF Economic Forecasting.

“Florida’s pasta bowl recession won’t be as enjoyable as a trip to Olive Garden,” says Snaith, returning to the kitchen for his final recession descriptor after coining the term “gravy boat recession” in 2009. “but there will be several benefits from a long period of slow economic growth.

Florida’s economy, as measured by real gross state product, is expected to grow at an average annual rate of 1.4% from 2022 to 2025. Although it will not contract during the recession, growth will slow to 0.5% in 2023 and 2024 before accelerating in 2025.

Florida’s labor force growth is expected to average 1.4% from 2022 to 2025. After increasing 2.5% in 2022, Snaith says, Florida’s labor force growth will slow from 2023 to 2024 before to accelerate slightly in 2025.

Florida’s wage employment growth will begin to falter during the recession, but not in all industries, Snaith says. After annual growth of -4.9% in 2020, the labor market rebounded to 4.6% in 2021. With employment growth expected at 3.9% in 2022, wage employment will contract by 0.6% in 2023 and 1.3% in 2024 before increasing by 0.8% in 2025.

The unemployment rate which rose from 3.3% in 2019 to 7.9% in 2020 fell to 4.8% in 2021 and will fall to 3.6% in 2022. The recession is expected to push the rate up to 4, 9% in 2023 and 5.8% before calming down. slightly to 5.7% in 2025.

Real personal income growth will average -0.7% over the 2022-2025 period. After a decline in 2022, growth will average 1.7% until the end of 2025, reaching 2.5% that year. Florida’s average growth will be 0.5% above the national rate over this four-year period.

Housing starts will rise in the future, Snaith predicts, but not fast enough to offset the severe short-term single-family housing shortage. The total number of housing starts, which increased from 156,762 in 2020 to 190,061 in 2021, will increase to 191,593 in 2022 before decelerating to 166,461 in 2023 and 161,911 in 2024. Total housing starts will reach 162 871 in 2025. as supply catches up with demand tempered by rising mortgage rates, declining affordability and recession.

For the complete Florida and Metro forecast, which now includes all 22 Florida metropolitan areas, visit business.ucf.edu/centers-institutes/institute-economic-forecasting/

The Institute for Economic Forecasting strives to provide comprehensive, accurate, and timely national, state, and regional economic forecasts and analysis.

Snaith is a national expert in economics, forecasting, market sizing, and economic analysis who writes quarterly reports on the state of the economy. Bloomberg News named Snaith as one of the nation’s most accurate forecasters for his predictions on the Federal Reserve’s benchmark interest rate, the federal funds rate.

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