A Hiring Surge, Florida’s Econ Boom & A Loyalty Pledge – July 7th, 2023
- A late-cycle surge. If you’re wondering what happened in the financial markets yesterday following a blowout ADP Private Sector jobs report, it was “a late-cycle surge”, in hiring. That’s according to the Chief Economist at ADP which said private sector job growth boomed in June with nearly a half-million new jobs added – the highest total in nearly a year. It was also a number which was greater than double what had been estimated. And it wasn’t just about how many jobs were added but where they were added - which for a second straight month, were everywhere but within the largest companies. Small and mid-sized companies rapidly added employees to payrolls while large companies continued to shed jobs. In terms of what it means for the economy, it’s the ultimate sign of resilience, as the smallest companies are only inclined to hire when the cash register is ringing more, and when they need more people to handle the business they have coming through the door. What it also means is higher interest rates. It’s now all but a given that after pausing in June, the Federal Reserve's record raising of interests will almost certainly continue in July and after July and potentially for months longer than many inside and outside of the financial markets had expected. That’s what was playing out in the financial markets yesterday... The expectation that interest rates are likely headed much higher starting in a few weeks. Which means that if you’re going to need a loan anytime soon – you're better off doing it now than waiting around – although that won’t help you with mortgage rates...they surged back above 7.2% immediately on the news. While the government jobs numbers will be reported today, a “late-cycle surge” in private sector jobs reported yesterday has changed the calculus for this economy. And speaking of economic surges...
- Florida’s economy continues to lead the way. In a case of whatever the country can do, we can do better, Florida’s economy has continued to grow far faster than the US economy through the first part of this year with Florida’s economy growing close to twice as fast as the national economy. Florida’s GDP rate has paced 3.5% growth compared to the country’s overall 2% growth. And that overall economic outperformance for our state has led to our local outperformance – starting with housing. While the overall housing market nationally has seen price declines of about 3% so far this year – we aren’t seeing any declines here. Despite back-to-back years of double-digit price increases preceding this year, Palm Beach County’s home prices have risen by another 1% so far this year. And much of the local demand for housing is being driven by those who continue driving here and staying for good. Despite already being the 3rd most populous county in the state, we’ve most recently been the 10th fastest growing of Florida’s 67 counties, adding an average of 36 net new residents per day for two years straight. As long as there remain far more people who want to come here than those that want to leave here, Florida’s economy will continue to lead the way nationally and Palm Beach County appears poised to continue to lead South Florida’s economy locally. Will this trend last forever? Nothing does. But will South Florida become less desirable? Probably not. And as long as that remains the case the longer-term trend will continue to be our economic friend.
- Pledging loyalty. The 2024 Republican presidential nominee will be from Florida. It won’t be Miami Mayor Francis Suarez. Speaking of which, just yesterday he made news for turning to artificial intelligence to boost his campaign (you know for when actual intelligence just won’t do). His PAC released a ChatBot which perhaps will display more intelligence when handling questions about Chinese genocide than he does. But my third takeaway today isn’t about the Uyghurs, or the third Floridian running for president, who appeared to confuse them with weevils. So yes, the 2024 Republican presidential nominee will be from Florida, but the question is will they be on the ballot in Florida? While many conservative Floridians feel conflicted about who to support for president... The state’s party made a power play yesterday to attempt to ensure that the candidates themselves won’t be conflicted with whomever the eventual nominee will be. Yesterday the Florida Republican Party made it a requirement for any candidate running for president in next year’s primary to sign a loyalty pledge to support the eventual winner. So far Trump nor DeSantis have been willing to sign such a pledge or to rhetorically suggest they’d support the other if they won. There’s plenty of time for that to change between now and Florida’s primary next March. But wouldn’t it be something if the third Floridian running for president were the only Floridian on Florida’s Republican primary ballot? The national Republican Party, much like Florida’s is attempting to advance a loyalty pledge for debate participation. What happens with that pledge and with who chooses to participate in those debates could be a preview of what’s to come in Florida. Though there’s also the chance the Republican nomination for president isn’t in doubt by the time we cast our presidential primary votes next year.