Employment in American Cities: Post-Covid Growth

Unemployment

Over the last year, the unemployment rate has been declining across the ten largest metropolitan areas. A mark of a strong economy, today’s low unemployment rate exemplifies a major recovery from the high unemployment rates caused by the Covid-19 pandemic. However, a strong economy and low unemployment can often be correlated with rising inflation as businesses raise wages to retain their workers [1].

In Greater Philadelphia, unemployment reached a high of 6.8% in June 2021. Through significant fluctuation, it has been trending downwards, reaching a low of 3.1% in April 2023. The data appears to indicate some seasonality to the unemployment rate. Although the trend isn’t exact, unemployment spiked in both August 2022 and August 2023. As of the most recent data, April 2024, unemployment is at 3.2%, less than half of the 2021 high and below pre-pandemic 2019 levels.

While unemployment rates in these ten metropolitan areas follow a similar trend, there are several distinct discrepancies. The Los Angeles region had the highest unemployment rate in April 2021 and, while occasionally overtaken by Chicago’s unemployment rate, maintains the highest rate as of the most recent data. Miami, on the other hand, has held the lowest unemployment rate from May 2022 to present day, reaching a low of 1.4% in January 2024.

Figure 1: 

Source: Bureau of Labor Statistics

Job Growth

While unemployment captures the percentage of the workforce who are without a job but actively looking, growth of available jobs can be another helpful measure of economic stability. On a national level, job openings exceed the number of unemployed individuals, with approximately 1.3 jobs for every person seeking work [2]. When jobs outnumber workers, the wages tend to go up, favoring the worker.

Figure 2 shows the percentage change in available non-farm jobs over the last three-year period. The Houston and Dallas regions have had the greatest growth in jobs, more than twice the percentage growth seen in the Washington, D.C. area. With 9.4% growth over the last three years, Philadelphia jobs are increasing at a faster rate than Los Angeles, Chicago, and Washington, D.C.

For some metropolitan areas, there appears to be a correlation between unemployment and relative job growth. For example, Miami has strikingly low unemployment and sits within the top three ranking for job growth. On the other hand, Los Angeles and Chicago have the highest unemployment rates in 2024 and amongst the lowest job growth. However, this trend doesn’t hold for all regions. Washington, D.C. has maintained low unemployment over the last two years, second only to Miami, yet has had relatively little job growth. These contradictory relationships may speak to the nature of jobs and the differing populations in each region.
 

Figure 2: 

Source: Bureau of Labor Statistics

Conclusion

In Philadelphia, the most recent data on unemployment and job growth are indicative of a strong economic recovery from the Covid-related loss in jobs. With current unemployment at less than half of its April 2021 rate, Philadelphia regional employment growth has outpaced half of the top ten largest U.S. cities. However, Philadelphia growth in total available jobs is greater than only Los Angeles, Chicago, and Washington, D.C.

Sources
[1] https://www.forbes.com/advisor/investing/inflation-and-unemployment/ 
[2] https://www.usbank.com/investing/financial-perspectives/market-news/effect-of-job-market-on-the-economy.html