Northeastern cities perform best in job growth

NEW YORK (Reuters) - Several cities across the northeastern United States were among the biggest gainers on the Milken Institute's Best Performing Cities 2009 index, the economic think tank said on Wednesday.

Four Texas cities were among the top five best performers in rankings on job growth and sustainability, the Los Angeles-based institute said in a report.

Fourteen cities across the Northeast, including some in Connecticut, Massachusetts and New York, were among the top 20 gainers in terms of job growth and sustainability.

The institute compiles the index annually by ranking 200 of the largest cities in the United States based on measures such as wage and salary growth and short-term job growth.

"In a period of recession, the index highlights (cities) that have adapted to weather the storm," said Ross DeVol, lead author of the report.

"As we move forward in a recovery that still lacks jobs, (cities) will be further tested in their ability to sustain themselves."

Hartford, Connecticut, was the largest gainer this year, jumping 101 spots from its 2008 ranking to 48.

Hartford was followed by New Haven, Connecticut, which rose 96 spots to 88.

"These cities didn't experience extreme housing bubbles and therefore avoided a major correction," said the report. "They also tended to have a smaller dependence on durable goods manufacturing and instead have a larger stake in the services sector."

Texas state capital Austin topped the rankings, helped by being home to a major research university and a lively technology cluster and professional services sector, it added.

Austin is one of a few cities in the United States that added jobs and is poised for net job growth this year.

Cities in Texas benefited from their oil and gas activity, a favorable business climate and a modest housing decline compared to other parts of the country, the report said.

The biggest decliners were cities in Florida and California, which have suffered most in the housing downturn.

Twelve of the 20 worst declining cities were in Florida, including Pensacola, which fell 124 spots to 157 to lead the laggards.

(Reporting by Tom Ryan; Editing by James Dalgleish)