Job Growth Winners (% Change February 2020 to July 2024)
Austin stands out as the clear winner when analyzing employment growth since the month prior to the pandemic decline (February 2020), with a remarkable 18% increase (+203k jobs). This is a testament to the city's booming tech industry, high in-migration, and business-friendly environment.
Other notable winners include Salt Lake City, Dallas and Las Vegas, experiencing double-digit employment growth from 10% to 12%. These cities have benefited from factors like population influx, lower costs of living compared to traditional gateway cities, and a strong demand for housing. Charlotte and Miami also posted robust growth of 7 to 9%, which reflect their increased appeal to businesses and individuals seeking a better quality of life. Notably, these markets have smaller employment bases as displayed above.
Of the larger employment hubs, New York Metro (NYC/Jersey City) is the winner gaining 2.9% (+206k jobs), while Chicago and Los Angeles lag behind. San Francisco employment declined by 2%, largely due to the exodus of tech companies and remote work's impact on demand for office space. However, with AI on the rise, the Bay Area should benefit from some employment growth over the next 5 years.
Recent YoY Momentum
When shifting focus to more recent YoY employment trends, Las Vegas and Salt Lake City show the most significant momentum, with 3.7% and 3.1% employment growth, respectively. Las Vegas, having initially struggled during the pandemic due to its tourism-heavy economy, seems to have bounced back, signaling a broader recovery in hospitality, entertainment, and service sectors. Salt Lake City’s growth can likely be attributed to its outdoor lifestyle attraction, relative affordability, and flourishing tech and financial sectors.
Interestingly, Austin and Dallas, while strong in overall growth since 2020, are showing more moderate YoY growth (1.4% and 1.3%, respectively), suggesting their explosive post-COVID recovery may be stabilizing. This could be attributed to companies reinforcing in-office RTO mandates in core markets, thus reducing in-migration levels, and overall affordability spreads narrowing. Denver saw a slight decline (-0.4%) in YoY employment partially driven by higher costs. Chicago, Minneapolis-St. Paul, and Washington, D.C., are showing very modest growth, barely above 0%.
Conclusion
These charts tell a story of divergence among U.S. cities in terms of employment recovery since COVID and more recent momentum. Markets like Austin, Salt Lake City, and Las Vegas are clear long-term winners, while cities like San Francisco and Chicago have struggled to regain momentum. This data is crucial for investors and real estate professionals to understand which markets offer the most promise for future growth.
Source: Bureau of Labor Statistics, Data based on metropolitan areas
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