Bloomberg News

Few U.S. Cities Recoup Jobs as Economy Rebounds From Recession

January 24, 2012

Jan. 18 (Bloomberg) -- While business and consumer spending are helping revive the U.S. economy, less than 10 percent of metropolitan areas have recouped all the jobs lost during the recession that ended in 2009, a report found.

Only 26 of the nation’s 363 metropolitan areas have seen employment rebound to pre-recession peaks, according to the report, prepared by forecaster IHS Global Insight and released by the U.S. Conference of Mayors today. Nearly 80 areas aren’t expected to see such a recovery for more than five years.

“The detrimental and costly effects of the Great Recession have been felt in all 363 metropolitan statistical areas that we measure,” according to the report. “The recovery is very uneven across U.S. regions.”

The spotty pace of recovery shows that some cities are struggling two and a half years after the end of the recession, which reduced tax collections and forced mayors to fire workers, scuttle public-works projects and raise fees to eliminate deficits. Even with revenue rebounding, local governments have eliminated 533,000 workers since their payrolls peaked in 2008.

Among cities where payrolls are forecast to rebound to pre- recession peaks by year-end are New Orleans; Burlington, Vermont; Pittsburgh; Madison, Wisconsin; and Dallas, according to the report. Those with the smallest amount of jobs recovered include some regions hit hardest by the housing market’s collapse, such as Reno, Nevada; Tallahassee, Florida; and Santa Rosa, California.

Push on Jobs

The U.S. Conference of Mayors is convening in Washington, where local-government officials plan to push for President Barack Obama’s administration and Congress to do more to reduce unemployment. The national jobless rate fell to 8.5 percent in December, the lowest since February 2009. It is down from 10 percent in October 2009, four months after the 18-month recession ended.

Last year, the Democratic president’s proposed $447 billion economic-stimulus plan, including funds to prevent further job cuts by local governments, failed to win enough support in Congress, where officials are focused on curbing the nation’s budget deficit. Congress has also reduced a grant program for cities by $1 billion, which the mayors’ report estimates may have cost 35,000 possible jobs.

IHS said it anticipates that spending reductions at federal, state and local levels will lower economic growth by half a percentage point in 2012.

The report does point to some regional improvement. Cities with economies tied to international trade, transportation and utilities will benefit this year, with those industries expected to create 563,000 jobs in 2012.

In the industrial Midwest, manufacturing is driving employment growth in parts of Michigan and Ohio. Booming energy production is also helping areas such as Pittsburgh, whose employment grew as a result of moves to tap natural gas reserves, according to the report.

--Editors: Mark Tannenbaum, Jerry Hart

To contact the reporter on this story: William Selway in Washington at wselway@bloomberg.net

To contact the editor responsible for this story: Mark Tannenbaum at mtannen@bloomberg.net


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