US Employment Growth Continues to have a Southern and Western Flavor
The US economy just set a record for job openings (there were 6.6 million of them at the end of March). The labor market is red hot right now and that is very evident in our largest metros. All 53 large metros (those with at least 1 million residents) added jobs in the year ending in March with a combined growth rate of 1.7 percent.
Austin was the fastest growing large metro with a 3.6 percent growth rate (36,800 jobs). Orlando, Phoenix, Riverside, Jacksonville, Seattle and Charlotte all had substantial growth rates of 3 percent or more.
The map below shows the growth rates were generally higher in the South and West.
Employment growth was also very strong in the 54 mid-sized metros (populations of 500,000 to 999,999). As a group, these metros added jobs at a 1.3 percent growth rate over the year ending March.
Provo, Utah lead the way with a 4.1 percent growth rate. Boise, Stockton and Fresno also posted strong growth rates over 3 percent. Four mid-sized metros saw employment loss over the year (Wichita, Bridgeport, New Haven, Toledo and Youngstown). Losses in manufacturing employment are key contributors to these metro's negative numbers.
There is an interesting geographic shift occurring for the mid-sized metros. The fastest growing metros in this group tend to be in the West more than the South. This could be due to high costs in some of the larger metros on the West Coast. The Bay Area is well known for high real estate costs which drive up wages and other costs of doing business. Smaller metros just outside the Bay Area like Stockton, Modesto and Fresno are likely seeing some employment growth as Bay Area firms look for lower cost alternatives to house some of their workers. Amazon, for instance, will soon employ 7,000 people in its Stockton location. In the South, the large metros do not have the same cost concerns and as a result, they are capturing more of the employment share over the mid-sized metros.
This tight labor market is an opportunity for metros that have seen modest growth in recent years. Employers are growing desperate for talented workers, and they will be willing to set up shop where they believe the talent pool is deep. Regions that can work to make their educational institutions more adaptable to a changing economy stand to reap the benefits by attracting these employers and bringing in good jobs. The challenge is finding potential workers who are not totally satisfied with their current work situation.
The data behind the maps can be found here.