Cities to see job gains, but many struggle

Wed Jan 18, 2012 11:47am EST

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(Reuters) - Almost all U.S. metropolitan areas will see job growth in 2012, but for many areas it will still take years for employment to return to pre-recession levels, according to a report released on Wednesday by the U.S. Conference of Mayors.

All but three U.S. metro areas will have job gains this year, led by expected growth of 3 percent in Myrtle Beach, South Carolina, according to the forecast, which was conducted by IHS Global Insight for the mayors' group ahead of its annual meeting in Washington this week.

Employment will likely shrink the most in Carson City, Nevada, falling by 1.1 percent. It will also drop in Odessa, Texas, by 0.1 percent, and in Midland, Texas, by 0.2 percent, IHS forecast.

Health services, trade, transportation, utilities and business services will provide the biggest jobs boost, the report found.

"By the end of this year, the report forecasts that almost every one of our 363 metro economies will see job gains, and the nation will have gained back 48 percent of its lost jobs," said Los Angeles Mayor Antonio Villaraigosa, who is also president of the Conference of Mayors. "But despite this progress, one thing remains clear: the recovery is slow and it's uneven."

In 2011, employment declined in 125 metro areas.

The housing bust put many in the construction industry out of work, and it was followed by a recession that caused thousands of layoffs. In 2011, local and state governments, crunched by revenue drops, slashed their payrolls, primarily in education.

The national unemployment rate has been above 8 percent for 35 straight months; it peaked in October 2009 at 10 percent.

Recently, though, it has been edging down, falling to 8.5 percent in December, and cities hope that soon they will return to the employment highs reached before the recession began in late 2007.

Earlier this month, the U.S. Labor Department reported that unemployment rates were lower in November than a year earlier in 351 of the 372 metropolitan areas it surveyed, and 259 metropolitan areas said nonfarm payroll employment had increased.

"At this time only 26 metro areas have completely recovered jobs lost in the recession. By the end of 2012, another 26 will have, and an additional 99 will have recouped over one-half of their losses," IHS forecast.

"But for almost 80 metros, full recovery is over five years away. The recovery is very uneven across U.S. regions, with the southeastern and southwestern metros, who were most affected by the housing bubble, looking ahead to years of recovery."

The wide range of recovery was apparent in 2011. While a third of the U.S. metropolitan areas registered job growth above the national average of 1.3 percent, 241 fell below that mark.

The IHS forecast found growing disparities in wealth could especially threaten cities, where most Americans live and work.

"Income decline and increasing inequality is an important issue for metro areas, as the trend in median income decline has not been experienced evenly," it said. "From 2009 to 2010, metro area households experienced a 2.2 percent decline in median household income while households in rural areas did not experience a statistically significant decline."

(Reporting By Lisa Lambert; Editing by Leslie Adler)

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