As first-time unemployment claims continue to roll in at levels similar to before the COVID-19 pandemic, Florida Gov. Ron DeSantis is warning that issues linked to inflation could push the nation toward a recession.
But DeSantis contends that Florida should be positioned to initially withstand such economic pressures because a proposed budget for the upcoming year has a record surplus.
“I think we’re being prudent by planning ahead so that if that would ever happen, hopefully we’ve got enough juice going on in Florida that we would be able, you know, to ride it out without major dislocations,” DeSantis said during an appearance Tuesday in Monticello.
DeSantis, running for re-election this year and widely believed to be eyeing a White House bid in 2024, said at another appearance in Jasper that inflation could require the Federal Reserve to “raise interest rates a bunch of times, and that could potentially plunge this country into a recession.”
DeSantis’ comments came before the U.S. Department of Labor on Thursday estimated 4,964 first-time jobless claims were filed in Florida last week, with consumers continuing to spend money and businesses maintaining a strong demand for workers.
Last week’s total was up from the revised count of 4,701 claims during the week that ended March 26, but it is generally on par with recent weeks. The state has averaged 4,610 claims over the past four weeks and 5,721 since the start of the year.
The numbers also are similar to early 2020, before the pandemic caused businesses to close or scale back. Across the first 11 weeks of 2020, Florida averaged 5,506 claims a week.
Last week, the Department of Labor reported the U.S. added 431,000 jobs in March — slightly off the consensus projection from economists of 490,000 for the month — with the national unemployment rate going from 3.7 percent to 3.6 percent.
With January and February figures revised up in last week’s report, the nation had added 1.685 million jobs since the start of the year.
But while the job market appears healthy, that hasn’t erased economic worries.
Economist Daniel Zhao of Glassdoor Economic Research wrote, “the job market is red hot with high employer demand continually driving healthy job gains and a steady stream of workers back into the labor force.”
However, Zhao added that “the coming months will be a test for the labor market with the Federal Reserve starting to hike rates, the war in Ukraine disrupting global supply chains, inflation continuing to surge and the stimulus of fiscal relief fading.”
Florida had a 3.3 percent unemployment rate in February, representing an estimated 348,000 people out of work from a labor force of 10.471 million.
Bolstered by federal stimulus money, and with state tax revenues topping estimates, Florida’s proposed $112.1 billion budget for the 2022-2023 fiscal year includes $8.9 billion in reserves in unallocated general revenue, in a pot known as the Budget Stabilization Fund and in a new Emergency Preparedness and Response Fund. An additional $1 billion is set aside in a separate fund created to prepare for increased costs of government services linked to inflation.
Lawmakers passed the budget last month, though it has not gone to DeSantis for his signature and line-item vetoes. It will take effect July 1.
During his appearance Tuesday in Monticello, DeSantis said the reserves are needed to offset potential economic impacts from inflation. He contended that the inflation rate is higher than a reported 7.9 percent.
“If you look at all the things, the staples, clearly gas is much higher than 8 percent increase over the last year,” DeSantis said. “Look at the grocery store … some of the staples that people need, much higher than 8 percent. You look at how, like, building homes, they had all these communities in Florida, you’d have a certain starting price, ‘Come go to the villas of wherever, starting at $199(,000),’ and now they have to X that out (because prices have increased).”