LaborIQ Market Index: October 2021 Metro Rankings
The LaborIQ® Market Index rankings help talent acquisition professionals find and retain talent, regardless of geography or industry. High-growth areas can increase their talent pool by sourcing from other metros, while lagging metros must focus on retaining limited supply.
The COVID-19 Delta variant caused jobs gains to slow substantially in August and September, after large gains June and July. But with fallng cases, hiring picked up in October. Although the recovery slowed a bit, the U.S. labor market is approaching 97% of pre-pandemic employment. Sixteen of the 150 metros ranked in the LaborIQ Market Index have already exceeded their pre-pandemic employment levels — which is up from nine and 10 metros, respectively, during July and August — and another 12 are within 1.0%.
The recovery has varied significantly based on location: Some metro areas in the Northeast, Midwest and Gulf Coast continue to struggle recouping lost jobs and retaining talent; others — including Austin, Jacksonville, Phoenix and Tampa — are seeing job expansion above pre-pandemic levels. While progress to recovery is one important variable in the LaborIQ Market Index calculation, net migration and wage growth tend to be a sign of a strong job market and can further fuel the economy and other indicators.
Key Takeaways: Road to Recovery and Growth
The LaborIQ Market Index top-10 rankings illustrate the strong labor markets and recoveries across the southern U.S., plus the Southwest, Mountain West and Pacific Northwest regions. Many metros ranked in the top 10 have had strong economic performance throughout 2021, driven largely by net migration and job gains.
1. Top four markets stay strong — Dallas, Austin, Phoenix and Denver have held the top four spots in September and October.
2. Dallas has been a top-performer since summer 2020 — always in the top 10, having held the No. 1 spot since April 2021.
3. Recent entrants make big gains — Houston moved up three spots to No. 5, and Seattle moved up from 10 to No. 6.
4. Who’s in, who’s out — Naples, Florida, reentered the top 10 at No. 9, due to strong job gains and growth, while Salt Lake City dropped out of the top 10 for the first time since April 2021.
The proprietary LaborIQ Market Index enables businesses and talent acquisition professionals to closely evaluate which U.S. metros are primed for recruiting and attracting talent. The index tracks 10 key performance indicators that represent the greatest drivers of a market’s economic growth or decline and track each metro’s progress toward pre-pandemic employment levels and recovery.
The Sunshine State’s Strong Recovery
Metros in Florida have made a strong recovery, with many areas in the state reaching or exceeding pre-pandemic employment levels. Florida is home to six of the 16 metros in the U.S. that have recovered all jobs lost to the pandemic — the most of any state — and seven of its metros land in the top 25 of the LaborIQ Market Index rankings of the 150 largest metros in the U.S.
Florida has a large population and lost many jobs in the initial stages of the pandemic, so jobs added in these strong metros will boost the national recovery. Many of its top-performing metros have some of the highest population growth and net migration in the U.S. Even as the national labor supply remains tight, the influx of new residents will provide Florida with a strong state-wide talent pool.
In September, Jacksonville and Tampa became two of the five largest metros to reach pre-pandemic employment levels. Smaller Florida metros — Palm Bay-Melbourne-Titusville and North Port-Sarasota-Bradenton — have also recovered all jobs lost to the pandemic. Naples and Cape Coral-Fort Myers are not far behind and remain around 1% below pre-pandemic employment levels.
Miami is a bit further behind in terms of recovering jobs lost to the pandemic and remains around 5% below pre-pandemic employment, but strong jobs gains combined with population growth and net migration put the Miami metro in the top 25 in October.
The main challenge Florida faces in its recovery is the reliance on tourism and the high share of workers in the Leisure and Hospitality industry. Leisure and Hospitality was among the hardest hit industries early in the pandemic and will be among the slowest to recover.
Regions Factor Into Both the Top and Bottom 10s
The LaborIQ Market Index captures the factors that impact labor market strength, including regional differences across the country. The top 10 metros are primarily in the Southeast, Texas, and Mountain West areas of the country, while the bottom 10 mostly comprises metros in the Northeast, Midwest and the Gulf Coast.
Metros in the top 10 perform well in key Labor Market Index indicators, including population growth, net migration, job gains and job growth. Strong economic fundamentals and job growth often fuel net migration, which increases labor supply as well as the demand for goods and services. Out of 150 metros in the LaborIQ Market Index rankings, the average population growth and net migration rankings for the top metros are 18 and 11, respectively; these top metros’ average ranking for job gains and growth is 21.
Top metros are leading the recovery and making progress to recouping jobs lost during the pandemic. However, even with favorable economic conditions, talent supply will struggle to keep up with the demands for hiring. Talent acquisition professionals in top metros will continue to be busy through 2022, likely looking to lower-ranked metros to fill open positions.
For those in the bottom 10 of the largest 150 metros, the average population growth and net migration rankings are 112 and 111, respectively, and the average ranking for job gains is 137 and job growth is 135. Most of these metros are forecasted to recover all jobs lost to the pandemic in 2024 or later, after the national jobs recovery expected in 2023.
Although they face a challenging environment, talent acquisition professionals in these bottom metros will be hard at work filling the many jobs lost. Businesses will need to be proactive to retain top talent with a tight national talent supply and increasing compensation demands for many occupations.
LaborIQ by ThinkWhy reports, forecasts and advises on employment conditions and the impact to jobs, industries and businesses across all U.S. cities.