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I'll say it: 'R-word' omens are lurking

Wow. I've gone all 13 days of the new year without mentioning the R-word. Time to break the drought. Let's talk recession.

By Robert Trigaux, Times Business Editor
Published January 13, 2008

Wow. I've gone all 13 days of the new year without mentioning the R-word. Time to break the drought. Let's talk recession.

Are we in a U.S. recession? Nope.

Is Florida in a recession? That's getting tougher to answer, and to many it sure feels like it. U.S. consumer confidence last week fell to an all-time low, thanks to worries about jobs, energy bills and home foreclosures. But a Florida recession - I still say No.

Are Floridians in a housing recession? I vote Yes - I mean how nasty does it have to get to admit at least that much?

This newspaper has printed the word "recession" in its pages just fewer than 30 times this month. In December, the word appeared 55 times. It eased in the fall but appeared 47 times in September after the summer credit crunch. But a year ago in January "recession" appeared only 16 times in the whole month.

Let's be sure of our vocabulary. By definition, a recession is a period of general economic decline. Specifically it's a drop in GDP gross domestic product for two or more consecutive quarters. We're not declining, just growing slower, so by this measure we're not in a recession.

Strict definition aside, signs abound of an economy on the edge of recession. And it's not just me yapping about it here. Consider the range of influential folks now talking up the R-word.

"U.S. business confidence fell to a new record low at the start of 2008 and is consistent with recession," said Mark Zandi, the frequently quoted economist at Moody's Economy.com.

"The R-word made more headlines this week, as yet even more firms called for the U.S. economy to fall into recession this year," said Wachovia's economists in their weekly commentary on Friday. "A few even believe we are already in recession." Wachovia's "recession warning model" shows a slightly better than 50 percent chance of recession in the next six months.

Senior economist Jan Hatzius of Wall Street's much-touted Goldman Sachs thinks there's a 66 percent chance of a 2008 recession. Why? The three-month average for unemployment has climbed more than one-third of a percentage point from its low. "Whenever you've tripped the one-third-percentage-point barrier, it's a [recession] indicator that's 10 out of 10," Hatzius said.

If he's right about fast-rising unemployment, Florida may be in for trouble.

The Bureau of Labor Statistics last week issued November job data showing metro areas with the fastest-rising unemployment are concentrated in Florida and California. Among 369 U.S. metro areas, for example, the largest over-the-year unemployment rate increases in November occurred on Florida's west coast: in Cape Coral-Fort Myers and Punta Gorda - each up 2.4 percentage points.

Thirty-four other areas, nearly two-thirds of them in Florida or California, recorded jobless rate increases of at least 1 full percentage point from a year earlier.

Among the 26 largest metro areas, Las Vegas reported the biggest jobless rate increase (up 1.2 percentage points) followed immediately by - guess who?

Tampa Bay: Up 1.1 percentage points to 4.4 percent from a year ago. To avoid a collision with the R-word, that's a fast lane we need to get out of pronto.

Robert Trigaux can be reached at trigaux@sptimes.com or (727) 893-8405.

[Last modified January 11, 2008, 22:59:17]