Consumer spending spurs Miami economy

For the past year, consumer spending has had more strength and momentum in South Florida’s economy, and that is expected to continue this year.

Even though, the increases in interest rates last year certainly put a dent in some areas, consumer purchasing is going to continue to maintain growth, said Dr. Manuel Lasaga, a clinical professor in the Department of Finance at Florida International University’s College of Business and president of Strategic Information Analysis, an economics and finance consulting firm.

“I think the fourth quarter of last year Gross Domestic Product (GDP) numbers will be reflected in actually South Florida employment numbers, and it will have a good positive growth and I think it will continue in the first quarter of this year,” Dr. Lasaga said. “Overall, the growth this year will be somewhat lower. The financial system here in South Florida is going to probably be looking out for some type of headwinds and some degree of uncertainty, but we will still see growth.”

Internationally, Miami-Dade County will begin to see some improvement, he predicted. Some of the economies like Brazil and Peru are starting to pick up a little bit more, which are “of course strong markets for us in South Florida,” he added. “Nothing is really going to fall out of the fence.”

One of the things that has been a positive in South Florida’s economy is travel, Dr. Lasaga said. The number of visitors from overseas has also helped the economy in terms of the hospitality industry, restaurants and hotels.

“The other party is in terms of healthcare,” he said. “We’ve seen some additional growth there as people again returned to not only the hospital but now elective surgeries in the last couple of years.”

One area that might pose a question is the real estate market, he said.

“One thing that might help that market this year would be a lowering of interest rates. The federal government was a little bit late in raising rates in 2022 and raised them noticeably in 2023,” Dr. Lasaga explained. “We’ve had mortgage rates reach 7.5%. Now those rates are starting to come down, but I’m not certain that the Fed will continue to lower rates given that inflation has not yet been tamed.”

When it comes to employment, Miami-Dade has been doing better than the nation and other parts of the state, he said. “Those employment numbers have been very good, and I think they will continue as people keep their travel activities at the same pace here.”

According to the Federal Reserve, the unemployment rate in Miami-Dade was at 1.6% in October 2023.

“Construction activity actually is negative in employment and, curiously, it’s like we caught the disease that Orlando started to experience last year, which is construction development falling behind because developers can’t find workers to work on sites,” Dr. Lasaga said.

“Do caution that there’s a real risk of a slowdown in our economy, but I don’t see a recession like people believed at the beginning of last year,” he continued. “This year’s presidential election, we’ll also have to be cognizant that whatever happens nationally will affect South Florida.”