Top U.S. Cities: Two New Metros Reach Full Jobs Recovery
Following hiring surges early in the summer, job gains came in much lower than expected for August. However, consecutive months of record job openings mean businesses are looking for workers, keeping talent acquisition professionals hard at work. In August, three states reported declines in employment – the same number as July. Two major metros joined Salt Lake City to reach their pre-pandemic employment levels, Phoenix and Austin, and two additional metros look poised to join them soon.
While job openings are at record highs and many major metros are hiring and recovering at impressive rates, several metros are still well below their pre-pandemic employment. Currently, 23 out of the 50 largest metros have employment that is at least 5% lower than pre-pandemic levels.
Even with 10.9 million jobs open in the U.S., immediate risks to recovery include higher costs for labor and simply not being able to find enough workers to fill open positions. Many employers are offering higher wages and additional benefits to entice workers. Other factors may continue to complicate the employment situation over the longer term – the Delta variant, vaccination requirements, and evolving monetary policy could impact business and investor strategies. Inflation fears were eased somewhat in August, although there were price increases for important goods, including gasoline, food, and shelter.
Talent acquisition professionals who can pinpoint the best locations to target recruitment efforts and source talent will have an advantage. With job openings at record highs, luring workers in with competitive wages and overcoming the skills mismatch is critical to the labor market’s recovery. If you’re recruiting in an area or industry at the front end of the recovery, targeting recruitment efforts to areas that are lagging behind could be a winning strategy to attract top talent.
ThinkWhy’s talent intelligence software, LaborIQ®, assesses the health of job markets based on the:
- Number of new jobs added
- Percentage of growth in jobs from the prior period
- Current employment level compared to the pre-pandemic level
Click metros on the map below to see key hiring stats for the 50 largest labor markets in the U.S. Below the map, find out which labor markets topped LaborIQ’s lists for these metrics in July 2021. All figures used are seasonally adjusted.
Pre-Pandemic Employment Levels Comparison
An important indicator of economic recovery and the availability of talent is how the current employment level compares to that of February 2020, just prior to the pandemic. This metric may not shift drastically month-to-month, but it is worth keeping an eye on these metros because the talent supply is tightening.
In June, Salt Lake City became the first metro to recoup jobs lost and expanded on those gains in July and August. Phoenix and Austin joined Salt Lake City in August as the first three major metros to reach their pre-pandemic employment levels. Jacksonville and Tampa are not far behind, with fewer than 1% of their pre-pandemic job losses to recover. Businesses in these cities will likely search for workers in other metros to relocate or work remotely to keep up with demand.
LaborIQ lists the following five cities as being closest to their pre-pandemic employment levels.
Most New Jobs Added
The highest volumes of new jobs added each month are influenced by a location’s population. However, given the depths of the job losses, and the recovery yet to go, these locations are an important component of progress to full recovery.
Los Angeles has held the top spot for job gains for most of 2021 and has added over 330,000 jobs so far this year, including 88,900 in August. Los Angeles’ recent job gains are likely driven by several important factors. First and foremost, Los Angeles is a large city and lost a lot of jobs early in the pandemic, so these recent gains reflect just how many jobs the metro had to add back. In addition, higher vaccination rates and lower COVID-19 case counts, combined with unemployment benefits ending, could all contribute to the current economic climate. Other large metros also saw impressive job gains in August – New York and Dallas each gained around 30,000, while Houston and Detroit also saw double-digit job gains just under 15,000.
By sheer volume, these larger markets will continue to lead in job gain even though the pandemic had a unique impact on the workforce in these locations, often losing more jobs relative to other areas. A significant number of jobs is expected to be added in these locations over the next few years, driving strong demand for talent acquisition professionals.
Best Month-to-Month Improvement in Job Growth
August metro-level employment data, combined with LaborIQ’s analysis of the nation’s top 50 most populous metro areas, show the large metros leading in job growth. The big job gains in Los Angeles, Detroit and Dallas have them in the top 5 metros in terms of job growth as well as job gains. Los Angeles’ employment grew by 1.53% in August, as compared to around 0.75% for the other metros rounding out the top 5.
While these lists focus on the top five markets for each metric, refer to the map above to find opportunities for your business. Locations underperforming in these categories, particularly related to pre-pandemic employment levels, may have a desirable talent pool or customer base for your business.
While things cooled off somewhat in August, the labor market added nearly 2.9 million jobs since May. Of the top 50 metros by size, 8 had negative job gains in August, up from 4 in July. However, many large metros saw huge job gains and growth in August, making them great targets for talent acquisition and recruitment efforts. It is critical for talent acquisition professionals to strike while the iron is hot with hiring demands since the rise in COVID-19 counts due to the Delta variant has added some degree of uncertainty to the hiring forecast through the end of 2021.
Of course, even with robust demand for talent, a variety of factors are creating challenges filling the record number of open jobs. Record quits (voluntary departures) and worker confidence in obtaining higher wages or desired workplace flexibility are playing a major role in the transition of talent this summer. Faced with reversals of remote work by some companies, employees are opting to find businesses that offer remote or hybrid options. In all, demand for hiring has never been stronger, but supply challenges will persist for at least the next few months and likely into 2022.
LaborIQ by ThinkWhy continuously forecasts and reports labor data at all levels, measuring impact to cities, industries, occupations and business across the U.S.