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Best USA Cities & States for Jobs and Employment

June 2009

June 2009

While signs indicate that the worst of the recession may be over, only six metropolitan areas across the USA are expected to regain their pre-recession employment levels by the end of 2009, according to projections from IHS Global Insight, a leading economic forecaster.

The areas poised for a jobs rebound later this year are: Anchorage, Alaska; Champaign-Urbana, Ill.; Coeur d'Alene, Idaho; Columbia, Mo.; Laredo, Texas; and the Houma-Bayou Cane-Thibodaux areas of Louisiana.

Only five areas are expected to see a similar jobs recovery in 2010: Las Cruces, N.M. and El Paso, San Antonio and the McAllen-Edinburg-Pharr and Austin-Round Rock areas of Texas.

Most of the country – 286 of 325 metro areas covered in the IHS analysis – aren't likely to regain their pre-recession employment levels until at least 2012.

Of these areas, 112 probably won't return to their recent peaks until 2014 or later. These include Rust Belt towns such as Cleveland, Dayton and Akron, Ohio; Detroit, Warren and Flint, Mich.; the hurricane-ravaged Gulfport-Biloxi, Miss., area and the greater Los Angeles region, where the housing bubble and high unemployment have strangled the local economy.

Of the 6 million jobs lost since the recession began 18 months ago, nearly 4 million were eliminated between November and April. The six-month freefall included a record four straight months with more than 600,000 job losses.

"This recession is unique because of the way it leveled the playing field," said James Diffley, IHS managing director of U.S. regional services. "The precipitating factor, after housing, was the finance industry, and that affected everybody. Now everybody's cutting back on debt, and the banks are being more cautious about lending, so there's less spending. All those things mitigate against a quick turnaround."

The IHS analysis covers 325 of 363 U.S. metropolitan areas, or population centers, as defined by the Census Bureau. Thirty-eight metro areas weren't included because of a lack of government data, said Jeannine Cataldi, an IHS senior economist.

Diffley said the projections reflect a local economy's response to various economic factors based on a statistical analysis of recent history.

IHS expects Texas, Oklahoma and Alaska to be among the first to match their previous employment peaks because their economies never fell as far as those in the rest of the country.

All three states are dominated by the energy industry and are benefitting from rising oil prices. They also have lower unemployment rates than the national average and have weathered only light-to-moderate job losses compared to the rest of the country. In April, Alaska was one of two states that had more people employed than it had in the previous year.

In addition, none of the states has suffered through the kind of major housing bubble that has sapped housing wealth nationwide. In fact, Alaska has one of the nation's lowest foreclosure rates.

Michigan, Ohio and Indiana, on the other hand, will take years to recover from manufacturing job losses, particularly in the troubled automobile industry.

"Although we expect the economy to bottom out in GDP terms during the second half of the year, job losses should continue throughout 2009, with the unemployment rate peaking just above 10 percent," said IHS chief U.S. economist Nigel Gault in a recent letter to investors. "We still expect total job losses to exceed 7 million. But the worst news is behind us, and employment declines should progressively soften as the year proceeds."

Expect much of the new job growth to occur in areas where the population is growing, Cataldi said. Many of the new jobs will be in the areas of professional and business services.

"We expect that to be a large growth sector going forward," Cataldi said.

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