Economic Report
12:55 pm
Fri February 14, 2014

Deep Freeze Cuts Into Employment And Retail Sales

In this week’s Economic Report, Dr. Rick Harper discusses a rise in initial jobless claims.  The U.S. Labor Department says the number of people seeking unemployment benefits rose 8,000 last week to 339,000.

Credit University of West Florida

Harper says jobless claims numbers have been ticking up nationally, due in part to the freezing weather. But, he says overall it’s a mixed bag. “I’ve been looking at the Florida numbers and they’re actually down slightly, and that’s consistent with a picture of moderating job growth.” A total of 3.52 million Americans received benefits as of Jan. 25 — the latest data available — up from 3.47 million the previous week.

Taking a look at retail sales, cold weather contributed to a drop in U.S. retail sales in January. The Commerce Department reports a decline of .04 percent last month, which marked the second straight drop following a 0.1 percent decrease in December. Harper attributes a decline in auto sales and generally soft prices throughout the economy.

Additionally, U.S. lenders repossessed fewer U.S. homes in January, bringing the number of completed foreclosures down to the lowest level in more than six years. Foreclosure listing firm RealtyTrac Inc. said says banks took back 30,226 homes last month, a drop of 4 percent from December.

However, many states recorded sharp increases in the number of homes entering the foreclosure process for the first time.  Harper says Florida remains out of sync with the national economy when it comes to the housing market. “We grew so fast in the 2003-2006 period and then shrank so much in 2007 to when housing prices bottomed out and started to recover just in the last several years,” he says.  As a result, there’s still a foreclosure backlog in Florida, where the judicial process takes more than 800 days. 

Data for Escambia County shows an uptick in the number of homes entering foreclosure in December and January. Harper says it’s nowhere near what it was during the height of the recession, but notes that it’s a little worrisome that the downward trend hasn’t continued.

Finally, now that Congress has agreed on legislation to raise the debt ceiling, Harper believes it clears the way to have a more meaningful discussion about the steps that ought to be taken to rein in federal government spending as well as what needs to be done to increase the amount of revenue necessary to fund essential needs.

Dr. Rick Harper is Director of the University of West Florida Office of Economic Development and Engagement. He’s currently serving as Senior Economic Policy Advisor to the Florida Senate.  http://www.uwf.edu/oede/, rharper@uwf.edu