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About


The Atlanta Fed's SouthPoint offers commentary and observations on various aspects of the region's economy.

The blog's authors include staff from the Atlanta Fed's Regional Economic Information Network and Public Affairs Department.

Postings are weekly.


June 5, 2014

Leafing through Developments in the New Beige Book

Yesterday, the Fed´s Board of Governors published the Beige Book. The report, published in advance of the upcoming Federal Open Market Committee meeting, provides a summary of recent economic conditions gathered by all of the Federal Reserve Banks.

The first sentence of each section often gives a succinct overview of economic conditions in each specific region. Below is a compilation of each section´s lead sentence:

National: All twelve Federal Reserve Districts report that economic activity expanded during the current reporting period.
Boston: Business activity generally continues to increase on a year-over-year basis in the First District, but performance varies across sectors.
New York: Economic activity in the Second District has continued to grow at a moderate pace since the last report.
Philadelphia: Aggregate business activity in the Third District grew at a modest pace during this current Beige Book period.
Cleveland: Business activity in the Fourth District expanded at a modest pace during the past six weeks.
Richmond: Fifth District economic activity expanded moderately in recent weeks, and contacts reported an optimistic outlook.
Atlanta: Sixth District business contacts described economic conditions as improving modestly in April and May.
Chicago: Growth in economic activity in the Seventh District was moderate in April and May.
St. Louis: The economy of the Eighth District has grown modestly since our previous report.
Minneapolis: The Ninth District economy grew at a moderate pace since the last report.
Kansas City: The Tenth District economy expanded modestly in late April and early May with solid expectations for growth during the coming months.
Dallas: The Eleventh District economy grew at a moderate pace over the past six weeks.
San Francisco: Economic activity in the Twelfth District continued to improve moderately during the reporting period of early April through mid-May.

Overall, it´s clear that economic activity continued to pick up at a moderate pace in every region. Here are some highlights from the Atlanta Fed´s section:

Employment and prices
District payroll growth improved modestly since the last report. Staffing agencies noted a small increase in transitioning workers from temporary to permanent positions. Firms continued to show a preference towards using capital investment to enhance efficiency over hiring.

Consumer spending and tourism
District retail reports were mixed in April and May. Merchants with multiple sites stated that sales were better in locations with more affluent customers. Retailers reporting lackluster growth attributed it to a number of factors, including people diverting spending to obtain mandatory health insurance and a reduction in food stamp benefits. Contacts from the District´s tourism and hospitality sector expressed an overall exuberance regarding activity. The near-term outlook among contacts remains positive.

Manufacturing and transportation
District contacts reported that manufacturing activity continued to expand. Growth in new orders, production, and employment suggested substantial strengthening in the District´s manufacturing sector. Transportation contacts continued to cite expanding activity in April and May. District ports reported significant increases in exports of energy-related products; record unit volumes of cars, trucks, and tractors; and double-digit growth in containerized cargo.

Real estate and construction
More District brokers reported growth this period than the previous report expressed. Roughly two-thirds of broker reports indicated that home sales had increased from the year-earlier level. The majority of contacts continued to report that home prices remained ahead of the year-earlier level. Reports on current conditions from District builders were also more positive than the previous report. Most contacts reported that recent activity either met or exceeded their plan for the period.

Banking and finance
On balance, loan demand across the District increased, evidenced by a combination of new loan growth and increased lines of credit. Community banks also noted loan growth. However, new loans were being poached from larger banks.

Natural resources and agriculture
Energy activity in the District continued to expand as new discoveries, production, and oil field development increased across the Gulf Coast. Energy firms expect continued strength in the sector during the summer months.

The Board will publish the next Beige Book on July 16.


Photo of Sadat Karim By Sadat Karim, strategic information research analyst in the public affairs department of the Atlanta Fed

May 27, 2014

A City of Big Ideas

Here in the Southeast, a buzz has been growing around the idea of innovation. In my hometown, Atlanta, startups have been popping up like weeds. What makes Atlanta a good place to innovate? To start, Atlanta is home to a number of top-tier universities and colleges, including Emory University, Georgia State University, Morehouse College, Spelman College, Agnes Scott College, and Georgia Tech, which U.S. News recently ranked fifth in the country for engineering. The city also boasts one of the fastest-growing urban populations in the country and a cost of living below the national average.

Among recent developments, a study done by the Kaufmann Foundation ranked Atlanta second in the nation in entrepreneurial activity. As well, Georgia companies drew in more than $116 million in venture capital funding in the first quarter of 2014, compared with $46 million just two years earlier. On top of it all, Forbes magazine placed Georgia Tech’s Advanced Technology Development Center (ATDC) on its list of the top 12 Business Incubators Changing the World. So what’s the deal? Is Atlanta becoming the next Silicon Valley? Why has innovation been the buzzword of the last decade here?

A growing consensus holds that innovation is the key to economic growth in developed economies. Innovation enables firms to become more productive and thus increase output without increasing the amount of inputs (labor, capital, etc.). Throughout modern history, the kings of all innovations are the game changers, sometimes referred to as general-purpose technologies. Game changers include inventions including the steam engine, electrical power and, more recently, information and communication technology. Juan Moreno-Cruz, an assistant professor in the school of economics at Georgia Tech, noted that although you can’t always recognize a game changer right away; “there are small things that combine that make general-purpose technologies important.”

Without the small things, general-purpose technologies never become significant, and it’s here that start-ups become important. Stephen Fleming, vice president for economic development and technology ventures and executive director of the Enterprise Innovation Institute (EI2) at Georgia Tech, says that, “Innovation is the reason that they exist.” Part of Fleming’s role is to oversee Georgia Tech’s ATDC, one of the nation’s oldest—it was founded in 1980—and largest business incubators attached to a university. Throughout the years, it has graduated more than 150 companies, which together have acquired over $2 billion in outside financing. “We shelter them from the ups and downs of the market,” says Fleming. “We do this for a while so that the company does not die from the downs.” But how exactly does the ATDC foster innovation in their start-ups? “We allow them the chance to fail.”

This is one of the many things that Fleming feels the U.S. does right. “There is a difference between being a failure and failing. If you fail, you just had a very expensive education on what not to do.” This holds true even for established small and medium-sized enterprises. “Let your people try stuff!” A survey done by PricewaterhouseCoopers asked CEOs which elements are some of the “most important ingredients to successful innovation,” and 57 percent of respondents agreed: “the right culture to foster and support innovation.” Meanwhile, 37 percent also responded by citing a “willingness to challenge norms and take risks.”

So, back to the question at hand: Is Atlanta becoming the next Silicon Valley? Fleming (wearing his “No Valley” button) would answer no; we’re becoming a better version of Silicon Valley that is welcoming to small companies. He points out four parts of our innovation ecosystem that make Atlanta a great place to innovate right now: First, the city has top-tier talent from all of the schools mentioned above. Second, unlike Silicon Valley, the city has the customers for the companies (Atlanta ranks third in the nation among cities with the most Fortune 500 headquarters). Third, customers who aren’t here are just a nonstop flight away, thanks to Hartsfield-Jackson Atlanta International Airport. Fourth and final, Atlanta has plenty of capital to work with.

It’s certainly a compelling case, and I’m looking forward to seeing how it plays out.

By Trevor Lindsay, an economic intern in the Atlanta Fed’s research department


May 9, 2014

Is Florida Finally Beginning to Flourish Again?

In March, we shared the view of our contacts in the Regional Economic Information Network (REIN) in north and central Florida. Those contacts described modest but sustained growth in activity in the first quarter of the year. That sentiment continued as winter turned into spring, with reports of increasing activity and greater optimism for continued growth during the remainder of the year.

Since mid-March, the REIN team in the Atlanta Fed’s Jacksonville Branch held 13 one-on-one interviews, one roundtable with a mix of business leaders, a Trade and Transportation Advisory Council meeting (recently summarized), as well as our branch board meeting. Although meeting participants noted acquisitions as a primary growth engine for most firms, some firms are expanding capacity to meet improving demand. Community banks are reporting increased commercial activity as bigger banks trim lines on small businesses. Though loan demand is still relatively soft, our contacts characterized clients as somewhat more confident, which bodes well for future lending activity. One banker cited noteworthy increases in credit card usage and home equity loans.

Retail contacts continue to express concerns about low-income consumers but note that the slowly improving labor market is resulting in somewhat more spending. In central Florida, contacts noted strong spending by more affluent consumers, including foreign visitors who are seeking high-end retail and dining. Robust home sales and price appreciation, accompanied by declining lender-mediated sales, were widely reported. Commercial construction is on the rise, especially in sectors such as health care, manufacturing, apartments, and higher education.

A focus on cost-cutting along with productivity-enhancing efforts continues. As one chief executive officer put it, “People are the last thing we’ll invest in.” Another company has committed to keeping its general and administrative expenses flat, which will result in support staff cuts to offset the increased cost of technology investments and health care. Two other large contacts noted significant reductions of full-timers to avoid having to provide health care coverage and to “be more in line with the industry.” We increasingly hear more about firms restructuring employee health plans and benefits to reduce costs to the company, including shifting more cost burden to the employee, restricting eligibility for spouses who may have access to insurance elsewhere, and adding risk-based surcharges.

Education contacts noted that the ability to place graduates seeking work has improved. Stories abound regarding difficult-to-fill positions (truck drivers, IT, accounting, etc.), and reports of a willingness to increase starting salaries are mixed. Generally, there were few reports of wage pressures mounting (outside of the trucking industry). The news on input prices remains relatively quiet.

Our contacts noted that qualified mortgage rules—and regulations more generally—have the potential to affect the housing recovery. A mortgage and refinance company has cut the majority of its workforce as refinance volume diminishes but noted that current regulations are making first mortgages, especially to the self-employed, “nearly impossible” to issue. Two other small-banking contacts indicated they have discontinued providing residential mortgages. However, two residential real estate contacts did not indicate any major concern about clients’ abilities to obtain mortgage loans.

At the April meeting of the board of directors of the Jacksonville Branch, we asked board members whether the current and near-term environment reflects an economy that is growing at a 2 percent rate or one that is growing at 3 percent. The majority view activity now and in the coming year to be more closely aligned with a 3 percent growth rate. The board members feel that the biggest potential impediment to growth is related to the consumer, as many people continue to struggle and consumer confidence remains lower than before the recession (see the chart).

Florida Consumer Confidence

The old proverb goes, “No matter how long the winter, spring is sure to follow.” One could apply this adage to the Great Recession and the long recovery and ask: Has an economic “spring” finally sprung? We’ll be keeping tabs as the year plays out.

By Sarah Arteaga, a Regional Economic Information Network director in the Atlanta Fed's Jacksonville Branch


April 4, 2014

The Graying of the Sunshine State’s Labor Force

Business contacts throughout the region have expressed, through the Atlanta Fed’s Regional Economic Information Network (REIN), a growing concern with an aging population and a shortage of qualified and interested younger candidates to fill positions vacated by retirees. A recent presentation spotlighted this trend in Florida. The report “Florida’s Economic Future & the Impact of Aging” by Florida’s Office of Economic and Demographic Research (EDR) notes that “population growth is the state’s primary engine of economic growth, fueling both employment and income growth.” The presentation reports two main concerns for the state: one is an aging population and a shrinking pool of workers, and the other is a growing need for services, natural resources, and infrastructure as the state’s overall population increases.

Florida’s population has grown from 15.9 million in 2000 to 18.8 million in 2010, a nearly 18 percent increase, and it is forecast to grow to 23.6 million by 2030. The population growth adds concerns for not only current older Floridians but also for future older residents, who will help further the demographic trend of an aging population and a labor force whose growth is slowing.

In 2010, Florida was one of seven states whose median age was over 40; at 17.3 percent, it is the state with the largest percentage of population age 65 or older. Of the nation’s top ten cities with the highest percentage of population age 65 or older, four are in Florida: Clearwater at 19.8 percent, Hialeah at 19.1 percent, Cape Coral at 17.0 percent, and Miami at 16.0 percent. Two years later, in 2012, the median age in Florida rose to 41, with six counties reporting a median age of 50 and older. Demographers expect Florida’s older population to nearly double between 2010 and 2040 (see the chart).

Florida's Aging Population


Supporting concerns expressed by REIN contacts, the EDR research reports that as approximately 4.8 million baby boomers are set to retire between 2011 and 2029, the share of workers to retirees will shrink. The chart below depicts the growth in population in the group ages 45 to 64 years (roughly speaking, the baby boomer cohort) since 2000, but it also shows a decline in residents ages 44 and younger, one reason for a declining potential labor force. This change in the composition of the population will cause the current ratio of three taxpaying workers to each retiree to decline to two to one by 2030.

Florida Age Distribution


The EDR also expects additional ramifications including weaker economic growth rates, potential upward pressure on wages to attract and retain skilled workers, and a growing retirement-age population, which could lead to a decline in consumer spending and changes in investment patterns. The EDR is also concerned about problems filling labor-intensive jobs such as firefighters, police officers, and construction workers. In addition, jobs will likely require increasingly specialized skill sets as technology advances.

By Marycela Diaz-Unzalu, an economic and financial education specialist in the Miami Branch of the Atlanta Fed

June 5, 2014

Leafing through Developments in the New Beige Book

Yesterday, the Fed´s Board of Governors published the Beige Book. The report, published in advance of the upcoming Federal Open Market Committee meeting, provides a summary of recent economic conditions gathered by all of the Federal Reserve Banks.

The first sentence of each section often gives a succinct overview of economic conditions in each specific region. Below is a compilation of each section´s lead sentence:

National: All twelve Federal Reserve Districts report that economic activity expanded during the current reporting period.
Boston: Business activity generally continues to increase on a year-over-year basis in the First District, but performance varies across sectors.
New York: Economic activity in the Second District has continued to grow at a moderate pace since the last report.
Philadelphia: Aggregate business activity in the Third District grew at a modest pace during this current Beige Book period.
Cleveland: Business activity in the Fourth District expanded at a modest pace during the past six weeks.
Richmond: Fifth District economic activity expanded moderately in recent weeks, and contacts reported an optimistic outlook.
Atlanta: Sixth District business contacts described economic conditions as improving modestly in April and May.
Chicago: Growth in economic activity in the Seventh District was moderate in April and May.
St. Louis: The economy of the Eighth District has grown modestly since our previous report.
Minneapolis: The Ninth District economy grew at a moderate pace since the last report.
Kansas City: The Tenth District economy expanded modestly in late April and early May with solid expectations for growth during the coming months.
Dallas: The Eleventh District economy grew at a moderate pace over the past six weeks.
San Francisco: Economic activity in the Twelfth District continued to improve moderately during the reporting period of early April through mid-May.

Overall, it´s clear that economic activity continued to pick up at a moderate pace in every region. Here are some highlights from the Atlanta Fed´s section:

Employment and prices
District payroll growth improved modestly since the last report. Staffing agencies noted a small increase in transitioning workers from temporary to permanent positions. Firms continued to show a preference towards using capital investment to enhance efficiency over hiring.

Consumer spending and tourism
District retail reports were mixed in April and May. Merchants with multiple sites stated that sales were better in locations with more affluent customers. Retailers reporting lackluster growth attributed it to a number of factors, including people diverting spending to obtain mandatory health insurance and a reduction in food stamp benefits. Contacts from the District´s tourism and hospitality sector expressed an overall exuberance regarding activity. The near-term outlook among contacts remains positive.

Manufacturing and transportation
District contacts reported that manufacturing activity continued to expand. Growth in new orders, production, and employment suggested substantial strengthening in the District´s manufacturing sector. Transportation contacts continued to cite expanding activity in April and May. District ports reported significant increases in exports of energy-related products; record unit volumes of cars, trucks, and tractors; and double-digit growth in containerized cargo.

Real estate and construction
More District brokers reported growth this period than the previous report expressed. Roughly two-thirds of broker reports indicated that home sales had increased from the year-earlier level. The majority of contacts continued to report that home prices remained ahead of the year-earlier level. Reports on current conditions from District builders were also more positive than the previous report. Most contacts reported that recent activity either met or exceeded their plan for the period.

Banking and finance
On balance, loan demand across the District increased, evidenced by a combination of new loan growth and increased lines of credit. Community banks also noted loan growth. However, new loans were being poached from larger banks.

Natural resources and agriculture
Energy activity in the District continued to expand as new discoveries, production, and oil field development increased across the Gulf Coast. Energy firms expect continued strength in the sector during the summer months.

The Board will publish the next Beige Book on July 16.


Photo of Sadat Karim By Sadat Karim, strategic information research analyst in the public affairs department of the Atlanta Fed

May 27, 2014

A City of Big Ideas

Here in the Southeast, a buzz has been growing around the idea of innovation. In my hometown, Atlanta, startups have been popping up like weeds. What makes Atlanta a good place to innovate? To start, Atlanta is home to a number of top-tier universities and colleges, including Emory University, Georgia State University, Morehouse College, Spelman College, Agnes Scott College, and Georgia Tech, which U.S. News recently ranked fifth in the country for engineering. The city also boasts one of the fastest-growing urban populations in the country and a cost of living below the national average.

Among recent developments, a study done by the Kaufmann Foundation ranked Atlanta second in the nation in entrepreneurial activity. As well, Georgia companies drew in more than $116 million in venture capital funding in the first quarter of 2014, compared with $46 million just two years earlier. On top of it all, Forbes magazine placed Georgia Tech’s Advanced Technology Development Center (ATDC) on its list of the top 12 Business Incubators Changing the World. So what’s the deal? Is Atlanta becoming the next Silicon Valley? Why has innovation been the buzzword of the last decade here?

A growing consensus holds that innovation is the key to economic growth in developed economies. Innovation enables firms to become more productive and thus increase output without increasing the amount of inputs (labor, capital, etc.). Throughout modern history, the kings of all innovations are the game changers, sometimes referred to as general-purpose technologies. Game changers include inventions including the steam engine, electrical power and, more recently, information and communication technology. Juan Moreno-Cruz, an assistant professor in the school of economics at Georgia Tech, noted that although you can’t always recognize a game changer right away; “there are small things that combine that make general-purpose technologies important.”

Without the small things, general-purpose technologies never become significant, and it’s here that start-ups become important. Stephen Fleming, vice president for economic development and technology ventures and executive director of the Enterprise Innovation Institute (EI2) at Georgia Tech, says that, “Innovation is the reason that they exist.” Part of Fleming’s role is to oversee Georgia Tech’s ATDC, one of the nation’s oldest—it was founded in 1980—and largest business incubators attached to a university. Throughout the years, it has graduated more than 150 companies, which together have acquired over $2 billion in outside financing. “We shelter them from the ups and downs of the market,” says Fleming. “We do this for a while so that the company does not die from the downs.” But how exactly does the ATDC foster innovation in their start-ups? “We allow them the chance to fail.”

This is one of the many things that Fleming feels the U.S. does right. “There is a difference between being a failure and failing. If you fail, you just had a very expensive education on what not to do.” This holds true even for established small and medium-sized enterprises. “Let your people try stuff!” A survey done by PricewaterhouseCoopers asked CEOs which elements are some of the “most important ingredients to successful innovation,” and 57 percent of respondents agreed: “the right culture to foster and support innovation.” Meanwhile, 37 percent also responded by citing a “willingness to challenge norms and take risks.”

So, back to the question at hand: Is Atlanta becoming the next Silicon Valley? Fleming (wearing his “No Valley” button) would answer no; we’re becoming a better version of Silicon Valley that is welcoming to small companies. He points out four parts of our innovation ecosystem that make Atlanta a great place to innovate right now: First, the city has top-tier talent from all of the schools mentioned above. Second, unlike Silicon Valley, the city has the customers for the companies (Atlanta ranks third in the nation among cities with the most Fortune 500 headquarters). Third, customers who aren’t here are just a nonstop flight away, thanks to Hartsfield-Jackson Atlanta International Airport. Fourth and final, Atlanta has plenty of capital to work with.

It’s certainly a compelling case, and I’m looking forward to seeing how it plays out.

By Trevor Lindsay, an economic intern in the Atlanta Fed’s research department


May 9, 2014

Is Florida Finally Beginning to Flourish Again?

In March, we shared the view of our contacts in the Regional Economic Information Network (REIN) in north and central Florida. Those contacts described modest but sustained growth in activity in the first quarter of the year. That sentiment continued as winter turned into spring, with reports of increasing activity and greater optimism for continued growth during the remainder of the year.

Since mid-March, the REIN team in the Atlanta Fed’s Jacksonville Branch held 13 one-on-one interviews, one roundtable with a mix of business leaders, a Trade and Transportation Advisory Council meeting (recently summarized), as well as our branch board meeting. Although meeting participants noted acquisitions as a primary growth engine for most firms, some firms are expanding capacity to meet improving demand. Community banks are reporting increased commercial activity as bigger banks trim lines on small businesses. Though loan demand is still relatively soft, our contacts characterized clients as somewhat more confident, which bodes well for future lending activity. One banker cited noteworthy increases in credit card usage and home equity loans.

Retail contacts continue to express concerns about low-income consumers but note that the slowly improving labor market is resulting in somewhat more spending. In central Florida, contacts noted strong spending by more affluent consumers, including foreign visitors who are seeking high-end retail and dining. Robust home sales and price appreciation, accompanied by declining lender-mediated sales, were widely reported. Commercial construction is on the rise, especially in sectors such as health care, manufacturing, apartments, and higher education.

A focus on cost-cutting along with productivity-enhancing efforts continues. As one chief executive officer put it, “People are the last thing we’ll invest in.” Another company has committed to keeping its general and administrative expenses flat, which will result in support staff cuts to offset the increased cost of technology investments and health care. Two other large contacts noted significant reductions of full-timers to avoid having to provide health care coverage and to “be more in line with the industry.” We increasingly hear more about firms restructuring employee health plans and benefits to reduce costs to the company, including shifting more cost burden to the employee, restricting eligibility for spouses who may have access to insurance elsewhere, and adding risk-based surcharges.

Education contacts noted that the ability to place graduates seeking work has improved. Stories abound regarding difficult-to-fill positions (truck drivers, IT, accounting, etc.), and reports of a willingness to increase starting salaries are mixed. Generally, there were few reports of wage pressures mounting (outside of the trucking industry). The news on input prices remains relatively quiet.

Our contacts noted that qualified mortgage rules—and regulations more generally—have the potential to affect the housing recovery. A mortgage and refinance company has cut the majority of its workforce as refinance volume diminishes but noted that current regulations are making first mortgages, especially to the self-employed, “nearly impossible” to issue. Two other small-banking contacts indicated they have discontinued providing residential mortgages. However, two residential real estate contacts did not indicate any major concern about clients’ abilities to obtain mortgage loans.

At the April meeting of the board of directors of the Jacksonville Branch, we asked board members whether the current and near-term environment reflects an economy that is growing at a 2 percent rate or one that is growing at 3 percent. The majority view activity now and in the coming year to be more closely aligned with a 3 percent growth rate. The board members feel that the biggest potential impediment to growth is related to the consumer, as many people continue to struggle and consumer confidence remains lower than before the recession (see the chart).

Florida Consumer Confidence

The old proverb goes, “No matter how long the winter, spring is sure to follow.” One could apply this adage to the Great Recession and the long recovery and ask: Has an economic “spring” finally sprung? We’ll be keeping tabs as the year plays out.

By Sarah Arteaga, a Regional Economic Information Network director in the Atlanta Fed's Jacksonville Branch


April 4, 2014

The Graying of the Sunshine State’s Labor Force

Business contacts throughout the region have expressed, through the Atlanta Fed’s Regional Economic Information Network (REIN), a growing concern with an aging population and a shortage of qualified and interested younger candidates to fill positions vacated by retirees. A recent presentation spotlighted this trend in Florida. The report “Florida’s Economic Future & the Impact of Aging” by Florida’s Office of Economic and Demographic Research (EDR) notes that “population growth is the state’s primary engine of economic growth, fueling both employment and income growth.” The presentation reports two main concerns for the state: one is an aging population and a shrinking pool of workers, and the other is a growing need for services, natural resources, and infrastructure as the state’s overall population increases.

Florida’s population has grown from 15.9 million in 2000 to 18.8 million in 2010, a nearly 18 percent increase, and it is forecast to grow to 23.6 million by 2030. The population growth adds concerns for not only current older Floridians but also for future older residents, who will help further the demographic trend of an aging population and a labor force whose growth is slowing.

In 2010, Florida was one of seven states whose median age was over 40; at 17.3 percent, it is the state with the largest percentage of population age 65 or older. Of the nation’s top ten cities with the highest percentage of population age 65 or older, four are in Florida: Clearwater at 19.8 percent, Hialeah at 19.1 percent, Cape Coral at 17.0 percent, and Miami at 16.0 percent. Two years later, in 2012, the median age in Florida rose to 41, with six counties reporting a median age of 50 and older. Demographers expect Florida’s older population to nearly double between 2010 and 2040 (see the chart).

Florida's Aging Population


Supporting concerns expressed by REIN contacts, the EDR research reports that as approximately 4.8 million baby boomers are set to retire between 2011 and 2029, the share of workers to retirees will shrink. The chart below depicts the growth in population in the group ages 45 to 64 years (roughly speaking, the baby boomer cohort) since 2000, but it also shows a decline in residents ages 44 and younger, one reason for a declining potential labor force. This change in the composition of the population will cause the current ratio of three taxpaying workers to each retiree to decline to two to one by 2030.

Florida Age Distribution


The EDR also expects additional ramifications including weaker economic growth rates, potential upward pressure on wages to attract and retain skilled workers, and a growing retirement-age population, which could lead to a decline in consumer spending and changes in investment patterns. The EDR is also concerned about problems filling labor-intensive jobs such as firefighters, police officers, and construction workers. In addition, jobs will likely require increasingly specialized skill sets as technology advances.

By Marycela Diaz-Unzalu, an economic and financial education specialist in the Miami Branch of the Atlanta Fed