For August 2021, Nashville jumped to 4th place in the LaborIQ® Index of the largest 150 U.S. metros, displacing Raleigh. Nationwide hiring surged during the early summer months, but the strength of the labor market has continued to vary significantly by metro area and overall grew more moderately in August.
Even with the loss of 22.4 million jobs due to the pandemic, nine of the 150 metros ranked in the LaborIQ Index have already exceeded their pre-pandemic employment levels and another 13 are within 1.0%. While that is only one metric in the Index equation, a strong, tight local job market can fuel other important indicators, such as net migration and wage growth.
Labor Market Indicators: Road to Recovery
The proprietary LaborIQ® Index identifies and tracks 10 key performance indicators that best measure and rank a local economy’s performance. These indicators or variables are present in every market and represent the greatest drivers of a market’s economic progress or decline and labor market recovery from the pandemic.
The ranking index provides a strong evaluation of which U.S. cities are attracting talent, recouping jobs and those primed for recruiting and hiring.
Music City is a Chart Topper
Nashville re-entered the top of the LaborIQ Index at number four, based on strong population growth which is fueling job creation. The Nashville area has been ranked in the top 10 for four consecutive months, as compared to number 46 a year ago.
LaborIQ Index: Top Five Metros Ranked in August 2021
- Dallas-Fort Worth-Arlington, TX
- Phoenix-Mesa-Scottsdale, AZ
- Austin-Round Rock, TX
- Nashville-Davidson-Murfreesboro-Franklin, TN
- Denver-Aurora-Lakewood, CO
Out of 150 metros, the Nashville metro area ranks in the top 25 for:
- Job gain,
- Job growth,
- Average hourly wage growth,
- Net migration, and
- Working-age population growth.
Most of the metro areas surrounding Nashville are also showing very strong performance and will be in the first wave to reach their previous employment numbers. This is important because of how much neighboring economies depend on each other.
Due to strong population movement to these areas, a substantial labor force has been maintained while other areas of the country simply have less available talent than before the pandemic.
Location Matters: Top & Bottom 20 Labor Markets
The LaborIQ Index paints a picture of how different and regionally focused performance and recovery looks – from both sides of the spectrum.
The entire Northeast, Midwest, and California are on the outside looking in when it comes to the strongest labor markets. The top 20 metros are primarily in the Southeast, Texas, and Mountain West areas the country.
Strong net migration has fueled the labor force and created demand for products and services. These metros have led the recapturing of lost jobs but even with rising populations, talent supply cannot keep up with demand, which in turn, is putting pressure on wage growth.
The 20 bottom-ranked metros have an even tighter regional footprint. The Northeast, eastern section of the Midwest, California and areas in-or-near Louisiana comprise 16 of the lowest 20 index rankings. Unfortunately, many of the metros in the Gulf Coast area - near New Orleans - are suffering through the aftermath of another devastating hurricane.
Recovery is expected to delay to 2024 or later for these metro areas. However, there is still upside for talent acquisition professionals as the number of jobs that will need to be refilled will be high, although keeping talent local will be a challenge.
Out of 150 metros, the average net migration ranking for these metros is 106 and population growth is 95. Of note, these locations are at major risk of losing talent to job markets with better opportunities, e.g. relocations. Out of these 20 metros, 15 are expected to have more people move out than move in during 2021, which is a drain on talent supply.
LaborIQ by ThinkWhy reports, forecasts and advises on employment conditions and the impact to jobs, industries and businesses across all U.S. cities.