Most U.S. Metros will Struggle with High Unemployment through 2013, Study Predicts

A sluggish economic recovery, mostly due to no sustained upturn in housing activity, combined with pressures from rising commodity costs, supply-chain disruptions, and extreme domestic weather means most U.S. metros can expect only minimal job growth by the end of this year, according to a new report prepared for the United States Conference of Mayors. Job growth in 2011 is expected to reach 1.2 percent and unemployment will not fall below 8 percent until late 2013. Only in the first half of 2014 will unemployment in the U.S. match its previous peak level of early 2008, the study finds.

Of course some metros will recover faster than others. Over the past year, noteworthy improvements have been recorded in the Midwest as the metros of the rust belt have rebounded from the severe manufacturing layoffs of 2008 and 2009, the study finds. Among the largest 100 metros, nine of the 20 greatest declines in unemployment rate over the last year occurred in the Midwest with Detroit, Grand Rapids, Chicago and Youngstown rapidly reversing some of the steepest layoffs of the recession. These metros also have the steepest climb to reach peak employment again, however. Five metros in the Midwest are not expected to reach those levels until 2020 or beyond. In all, 48 metro areas are not expected to return to peak employment during this decade.

The study predicts a modest improvement for economic growth in the U.S. for the second half of this year rising to 3.5 percent, up from 1.9 percent growth in the first half. The U.S. Metro Economies Report is available at: http://www.usmayors.org/metroeconomies/2011/report.pdf.