Labor Data: Miami Job Market Showing Signs of Anemia
ThinkWhy It Matters
The Miami metro area is experiencing anemic job growth. Home price growth as reported by the National Association of Realtors for the South Florida area during Q12019 stands at 2.9 percent, approximately 100 basis points below the U.S. When you blend that with slow job gains, an increasing unemployment rate and wages not picking up, this is a metro to watch closely.
The demand for single-family housing is a bright spot, but an over-supply in multi-family means that jobs are not coming to the area fast enough to fill them. Housing and jobs go hand in hand, so Miami’s economy may remain anemic for a period of time.
The Miami metro area’s monthly job gain has been soft but volatile throughout this year. The metro area produced approximately 1,000 jobs during the month of June 2019 for an annual growth of 2.2 percent. The pace of job gain started slowing down in October 2018 and remains at that level of 27,000 jobs per year.
During optimal economic conditions, Miami has the capacity to produce between 35,000 to 40,000 jobs. The unemployment rate increased slightly to 3.2 percent in May 2019 from 3.0 percent in April 2019.
“Businesses are coming to Florida because low taxes and reasonable regulations across all industries are supported,” said Governor DeSantis. “We will keep working to develop a resilient, business-friendly environment so Floridians and their communities may have the opportunity to achieve economic prosperity.”
• Even with low unemployment, wage growth in Miami is at 1.4 percent and has not shown signs of picking up. This may be a result of the metro area being dominated by lower-wage jobs in Leisure and Hospitality.
• Among the industries, Tech, Education, and Healthcare are among the top industries leading job growth in the metro area in the white-collar jobs category.
• Leisure and Hospitality is producing job growth greater than the recent five-year average.
• Construction is doing well in the market as well. Job growth in Construction stands at 6.6 percent in June 2019.
• Tourism in Miami is the dominant sector and is no longer seasonal since tourists flock to the city throughout the year contributing to the economy through hotels, nightlife, and restaurants. Miami is also the cruise capital of the world. Besides tourism, finance, media and communication (Spanish), and international trade dominate the share of employment in the metro. But don’t forget, about 7.3 percent of total employment is comprised of tech jobs in the metro area.
Single-family demand (jobs) outpaced supply (lagged permits) during June 2019 by a large margin, indicating single-family home prices should increase. Home price growth as reported by the National Association of Realtors during Q1 2019 stands at 2.9 percent.
With both the high level of home prices and increasing demand, cost of living in the metro should increase making it more difficult to acquire and retain talent. However, with the multi-family ratio slipping below the equilibrium, growth in rental rates will be constrained.
Gain more insight into employment statistics, including job growth and hot and cold employment sectors, with ThinkWhy's Major Market Activity Report for June 2019.