Promising employment figures hide slow recovery in many metropolitan areas

Employers in America’s largest metropolitan areas added nearly 453,000 workers to their payrolls in March. This marked the largest monthly addition to job totals in the country’s 191 largest metropolitan areas since October, and is a sign that a steady resumption of the pandemic recession is underway with rising vaccination rates, stimulus checks on households and the reopening of businesses.

The employment increase in March continues an upward trend in employment in 2021 after employment gains slowed at the end of 2020. The major economies of the metropolitan area created 321,500 jobs in January and 371 000 jobs in February. However, even with increasingly bright labor market prospects, many economies in the metro area – especially those dominated by the hardest hit industries – still have a long way to go to fully recover.

Job totals in most metropolitan areas remain well below their pre-pandemic baseline

Even with the increase last month, total nonfarm employment in the largest metropolitan areas remains below 7.5 million jobs (or 6.4%) from pre-pandemic levels in February 2020. Very large metropolitan areas (those with at least 1 million inhabitants) remain the most affected, with employment nearly 7% below pre-pandemic levels, compared to employment gaps of almost 5% in the areas medium-sized (250,000 to 499,999 inhabitants) and large (500,000 to 999,999 inhabitants) metropolitan areas.

Figure 1 shows the percentage change in employment from February 2020 to March 2021 in the 191 largest metropolitan areas. Tourist hubs such as New York, Las Vegas, Orlando, Florida, Honolulu and Atlantic City, New Jersey, are among the metropolitan areas where jobs have remained more than 10% below pre-pandemic levels in March. Meanwhile, many southern and Utah metropolitan areas are close to recovery, with jobs less than 2% below pre-pandemic levels. Five large and mid-sized metropolitan areas surpassed pre-pandemic levels of total employment in March: Boise City, Idaho; Lakeland, Florida; Ogden, Utah; Provo-Orem, Utah; and Waco, Texas.

Leisure and hospitality created the most jobs in March, but remains the furthest below its pre-pandemic employment level

While most major economic sectors created jobs in March 2021, the leisure and hospitality industry – the sector that suffered the largest number of job losses from a pandemic – posted the largest gains, adding 325,000 jobs nationwide. Leisure and hospitality alone accounted for more than a third of net job gains during the month.

Despite this, the largest metropolitan areas had 2.7 million fewer leisure and hospitality jobs in March than a year earlier. Falling jobs in leisure and hospitality still account for nearly 40% of total job losses since the start of the pandemic. As COVID-19 continues to limit events and travel, regions heavily dependent on entertainment, recreation, accommodation and food services remain furthest below their previous employment levels the pandemic. Metro areas in which job losses in these industries account for more than two-thirds of all job losses include major tourist centers such as Las Vegas, Myrtle Beach, SC, Nashville, Tennessee, and Tampa-St. Petersburg, Florida


To be sure, many other sectors contributed to the job gains in March, indicating that the recovery is broader than just Americans returning to restaurants and travel. Mining, forestry and construction companies hired 145,000 new workers, while the professional and business services sector added 120,700 more employees (see Figure 3).


Even with sustained progress, full resumption of jobs can take months or years

Although job gains in March were relatively broad, 30 of 191 metropolitan areas added no jobs at all that month. Metropolitan areas of Ocala and Pensacola in Florida saw employment declines of nearly 0.5%, while New Orleans and Baton Rouge in Louisiana lost 900 and 600 jobs, respectively, marking their second monthly decline this year.

As this inconsistent progress suggests, the road to a full labor market recovery in metropolitan areas can be long and complicated. Figure 4 shows a scenario in which the 191 metropolitan areas replicate their total March employment gains (453,000 jobs) in the coming months. Even at this robust growth rate, it would still take about 18 months (until September 2022) to return to pre-pandemic employment levels.


Of course, individual metropolitan areas are recovering at different rates. If each reproduced their own March job gains in the coming months, 71 metropolitan areas would reach their pre-pandemic employment levels within the year. 45 others would take between one and two years to recover. It would take more than two years to recover 40 more. And the 30 metropolitan areas that failed to create jobs in March will need to start doing so before they can predict how long a full recovery will take.


The economies of metropolitan areas are not yet out of the woods

Upcoming April 2021 employment report could point to further acceleration in job gains as vaccination rates continue to rise, COVID-19 cases continue to decline, and more people return to work safely. But the differential impacts of the crisis across sectors and locations – in particular, the devastating effects of the pandemic on leisure and hospitality businesses, workers, and regional hubs – suggest the potential for a prolonged recovery period. in many economies of the US metropolitan areas.

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