Economist Jerry Parrish buried the lead in his talk at the Economic Club of Florida’s monthly meeting, but once the lunch plates were cleared, he did finally make a prediction about whether Florida is on the brink of recession:
“My guess is a pretty high probability. The model says about 67% right now … could be higher, coming in late this year” the chief economist and director of state and local policy analysis at the Institute of Government at Florida State University told the group.
While the Great Recession of the late aughts hit Florida harder and longer than much of the U.S., Parrish said the Sunshine State has what it takes to be a bright spot in the expected economic downturn.
“Remember, before COVID, we were growing jobs, more than one out of every 11 jobs in this country,” Parrish said.
After the worst of the pandemic, Florida is No. 6 in recovery and was able to regain lost jobs by October 2021. Wages are up and the state is at almost full employment. The only sectors lagging are hospitality, education and health services. The health services deficit could be attributed to an ongoing nursing shortage, he said, exacerbated by a wave of retirements during the pandemic.
“Florida has become a dynamic place now that you can work from anywhere. People can move to Florida, get a direct flight to wherever they have to go in most cases … except Tallahassee,” Parrish said to laughs from the hometown audience. “We’re getting people moving here (and) they’re … revitalizing our rural communities, which is great.”
While he pooh poohs the commonly accepted notion that a recession is called when GDP has dropped for two quarters in a row — that’s the job of a group of eight people at the nonprofit National Bureau of Economic Research — Parrish did cite two indicators that point in the recession direction.
Consumer sentiment — which measures how households feel about the economy — has dropped sharply which, in the past, has preceded a recession, he said.
Also, usually the interest rate for a 10-year bond would be lower than a 2-year bond, but that “yield curve” has flattened lately and actually gone into “hard negative” territory, portending a recession.
Answering a question from Dominic Calabro, his former boss at Florida TaxWatch (he was also chief economist for The Florida Chamber of Commerce), Parrish said recession could actually provide an upside.
“I believe it would take a lot of the inflationary pressure off of us. We’ll give the supply chain an opportunity to catch up,” he said.
A recession could also prove to be a boon for small business creation. “A lot of people, once the layoffs come … some people will choose to create their own business and create their own jobs.”
The next speaker at the Economic Club of Florida’s monthly meeting is self-made multi-millionaire Freddie Figgers. The CEO of Figgers Communications, Figg Health and Figgers Foundation and Gadsden County native will speak on his path to success as an American technology entrepreneur, inventor and philanthropist. The meeting is set for Aug. 25 at the Florida State University Alumni Center.