National job growth slowed further in September, according to the latest employment figures from the Bureau of Labor Statistics.
The United States added about 660,000 jobs in September. That’s down from the 1.5 million jobs gained in August and the 1.8 million increase in July. The national unemployment rate fell to 7.9%, but the country has recovered only about half of the jobs lost in March and April, bringing overall employment to roughly mid-2015 levels.
Instead of analyzing month-over-month job growth leaders and laggards, CoStar this month plotted the largest cities in the country based on both the initial drop in employment from February to April and the market’s respective employment recoveries since April.
Nationally, employment dropped roughly 13.5% from February to April and bounced back by roughly 8%.
Areas in the top left quadrant, such as government-heavy Washington, D.C., saw relatively limited job losses, but have also had a lackluster recovery. Though the weaker recoveries of these markets, including Houston and Oklahoma City, might be concerning at face value, for the most part the employment situation is rosier than the national average.
The cities in the top right quadrant are ones that experienced a minor drop in employment and a relatively strong recovery. Indianapolis is the highlight here, with nearly a 10% increase in employment since April after losing about 11% of its employment base initially. Total employment in the Midwest market is less than 2% below the February peak.
The bottom right shows the areas that were hit hardest by the initial shock of the pandemic, including the greater New York region, Detroit and Las Vegas. But these markets have gained momentum over the past few months and have seen a relatively robust bounce back, especially the places to the far right of the axis, such as Las Vegas and Detroit.
Last, the bottom left quadrant is the danger zone. Those cities were hit hard by the initial downturn and have posted weaker-than-average recoveries. These markets risk remaining laggards during a recovery that is already slowing down. Travel-dependent Honolulu stands out here, with an initial employment drop of about 19% and a recovery of only 2%.
While it’s easy to identify the outperformers and underperformers on this scatter chart, it’s clear that most metropolitan areas are clustered near the center of the axis. To get a more granular look at city-level performance, CoStar zoomed in on that pack of markets to highlight any regional trends.
The Midwest possesses cities in all four quadrants, but most markets saw a relatively mild initial drop in employment. Aside from Indianapolis, other strong performers include Cincinnati, with its robust recent recovery, and the Missouri cities of St. Louis and Kansas City, which held up well early on. These cities have also outperformed in terms of apartment rent growth and absorption, or the number of units physically occupied versus vacated. That indicates population growth may be holding up better than it has at any point over the past decade.
The Western region has been hit hard by the pandemic-induced recession, with cities in Southern and Northern California still reeling from the crisis. Phoenix led the country in job gains percentage-wise in August, but the city has posted an underwhelming rebound in jobs overall. Only Denver and Seattle have gained back an above-average percentage of jobs since April.
In the Northeast, government-heavy Virginia markets Norfolk and Richmond have seen similar performances to Washington with mild employment drops, but weak employment recoveries. At the other end of the spectrum, Philadelphia and Boston have performed more like the greater New York area, with large initial employment losses but stronger than average recent employment gains.
Unfortunately, most of these markets remain toward the bottom in making up the jobs lost during the pandemic. There is some hope, however. As coronavirus cases rise elsewhere in the country, they have remained at much lower levels in the Northeast, which could portend to a quicker rebound when the country returns to some sense of normalcy.
The South’s fast-growing, diverse economies withstood the worst of the pandemic at first, but southern cities also haven’t seen the strongest recoveries. Markets such as Dallas-Fort Worth, Atlanta and Austin, Texas, have ranked as employment leaders since the early months of the pandemic, but momentum has cooled somewhat in each of those areas. The South also has a handful of cities in the bottom left quadrant, most notably tourism-dependent Fort Lauderdale and Palm Beach in Florida.
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