Updated November 30, 2013

Study: Best Cities for Job Growth

It’s no secret the country is still emerging from the 2007-2009 recession. But some cities are adding jobs at a much faster pace than others. If you’re a young professional looking for a place with great job prospects, or a small business that wants to set up shop in a boomtown, find out what cities are growing the most jobs.

Study Methodology

Looking at the largest 50 metropolitan areas in the country, we considered three main factors:

  1. Overall long-term growth (measured by change in an area’s total employment)
  2. Reduction in the unemployment rate
  3. Company hiring plans

We began by considering how employment has been changing over the longer term, by looking at U.S. Census data for the number of employees in each urban area. This number reflects total employment growth, so it factors in new people moving to an area as well as jobs found by recent graduates.

Next, we considered how each area’s unemployment rate changed over just the past year, based on data from the Bureau of Labor Statistics. While many cities are bouncing back quickly from high levels of unemployment, a number actually lost ground over the year, resulting in more unemployed folks competing for jobs in those areas.

Last, we looked at the Gallup Job Creation Index, which is based on a poll of workers who were asked whether their employers have been hiring or laying off staff. Gallup subtracts the percentage who said their bosses are letting people go from those who reported new hiring, to get a bottom-line index number for each area.

1. Orlando, FL

  • Change in Employment: 4.9%
  • Change in Unemployment -1.6 percentage points
  • Gallup Job Creation Index: 28.5

In a state that suffered some of the worst consequences of the housing bust that started in 2007, the Orlando area is coming back with a bang. Though its employment rate is still relatively high at 7.7 percent, Orlando reduced the rate significantly, relative to other areas on this list, by 1.6 percentage points over the past year. It also added 47,000 jobs, an increase of nearly 5 percent.

2. Houston, TX

  • Change in Employment: 2%
  • Change in Unemployment: -0.9 percentage points
  • Gallup Job Creation Index: 33.3

Everything’s bigger in Texas, and that includes employers’ plans for hiring. The Houston area placed at the top the heap on that measure, with a full 45 percent of employees saying their bosses are hiring and nearly 12 percent saying they’re letting people go. The area’s employment rose by 2 percent, which, since it’s a large urban center, adds up to more than 56,000 new jobs. That’s basically a whole city’s worth of new workers. The unemployment rate also fell by a respectable 0.9 percentage points.

3. Denver, CO

  • Change in Employment: 1.8%
  • Change in Unemployment: -1.4 percentage points
  • Gallup Job Creation Index: 23.3

The Mile-High City reached third place in this study, with a solid 1.8 percent jump in the number of workers and a 1.4 percentage point drop in the unemployment rate. Those changes reflect both people emerging from unemployment and new migration into the city from elsewhere. On the Gallup Job Creation Index, it scored 23.3, with more than twice as many employers adding jobs as eliminating them (37.4 percent versus 14.1 percent).

4. San Antonio, TX

  • Change in Employment: 5.6%
  • Change in Unemployment: -0.5 percentage points
  • Gallup Job Creation Index: 24.8

Like its near-neighbor Houston, San Antonio is seeing signs of jobs popping up all over. It ranks at the very top of our list in employment growth, at 5.6 percent. Its 0.5 percent reduction in the unemployment rate looks even better if you know it’s now achieved a rate of just 6.6 percent. When it comes to the Gallup Job Creation Index, San Antonio’s score of 24.8 ties it at 10th place. It comes out even better, in fifth place, if you just look at the percentage of its employers that are hiring (41.8%). However, its score on the index is pushed down by the fact 17 percent of workers have reported layoffs by their employers.

5. Louisville, KY

  • Change in Employment: 0.4%
  • Change in Unemployment: -1.1 percentage points
  • Gallup Job Creation Index: 26.9

This urban area, which also encompasses Jefferson County in Indiana, has one of the lowest cost of living levels on the list, making it even more attractive to potential residents than its job creation numbers would suggest. It scores an impressive 26.9 on the Gallup Job Creation Index, with 39.9 percent of employers hiring and just 13 percent laying people off. The city is still struggling with unemployment – at 8.4 percent – but the numbers are moving in the right direction. Unemployment is down 1.1 percentage points compared to last year, and it has added jobs as well, with a 0.4 increase in employment.

6. San Francisco, CA

  • Change in Employment: 0.4%
  • Change in Unemployment: -1.1 percentage points
  • Gallup Job Creation Index: 24.8

Greater San Francisco (this metro area also includes Oakland and Fremont) is the top job performer in California. It dropped its unemployment rate by 1.1 percentage points, and 38.3 percent of its employers are hiring, while just 13.5 percent are letting people go. San Francisco is a notoriously expensive place to live, but it’s also an iconic American city with a lot going on for young professionals, and its job growth numbers provide another good reason for people starting out their careers to consider it.

7. Austin, TX

  • Change in Employment: 1.8%
  • Change in Unemployment: -0.6 percentage points
  • Gallup Job Creation Index: 26.2

The third Texas city on our list, Austin is well known as a cultural center. It also has an impressively low 5.8 percent unemployment rate, and the number has come down by 0.6 percentage points since last year. Just as impressively, employment in the area has grown 1.8 percent, and a full 40 percent of employers are hiring, compared with 13.9 percent that are laying people off.

8. Columbus, OH

  • Change in Employment: 2.1%
  • Change in Unemployment: -0.3 percentage points
  • Gallup Job Creation Index: 29.9

This Midwestern urban center has the second-best rating on the Gallup Job Creation Index with 42.9 percent of employers hiring, more than three times the 13 percent that are letting workers go. The city also managed a 2.1 percent hike in employment, bringing the metropolitan region to a total employment base of more than 900,000. Unemployment showed a solid 0.3 percentage point drop, to 6.9 percent.

9. Seattle, WA

  • Change in Employment: 0%
  • Change in Unemployment: -1.2 percentage points
  • Gallup Job Creation Index: 24.8

This Northwestern population center and birthplace of good American coffee managed to rank ninth on our list without adding to its total employment numbers. That’s partly because it shed 1.2 percentage points from its unemployment rate and partly because it won a strong 24.8 score on the Gallup Job Creation Index. The good news for the city is that the Gallup index is the most forward-looking of the measure we used, so the best may be yet to come.

10. San Jose, CA

  • Change in Employment: 1.3%
  • Change in Unemployment: -1.1 percentage points
  • Gallup Job Creation Index: 23

Like nearby San Francisco, San Jose is doing well in a state that has been hit hard by the housing crisis and recession. Long known as a technology center, this area has some of the best-paying jobs in the country, so job growth here means the growth of lucrative opportunities. The metro area increased its total job numbers by 1.3 percent, and its unemployment rate dropped by 1.1 percentage points, demonstrating strong growth, although that still leaves San Jose with an unimpressive 8.2 percent of its workforce unemployed. Meanwhile, 38.2 percent of employers are hiring while 15.2 percent are letting workers go, putting the area in the top half of the rankings in the Gallup Job Creation Index.

This study uses numbers for entire metro-region economies, so it doesn’t capture the specific factors that go into any particular individual’s chances for finding work. Some cities may be better for teachers, and others for financial professionals. Of course, there are also all sorts of lifestyle considerations that go into any decision to relocate.

What this list does offer is a glimpse into the urban areas where the economy is on the move and employers are—at least on average—charting a path for growth. Living in a growing city means not being stuck in any one job since there are likely to be more openings to choose from. It also makes it easier for both members of a couple to find work, which is important for many young people torn between their personal life and career path. Ultimately, of course, finding a job is a matter of qualifications, determination and luck, but it doesn’t hurt to start out by looking in a promising location.

Here are the sources we used to compile this study:

Livia Gershon is a contributing writer at CreditDonkey, a credit card comparison and reviews website. Write to Livia Gershon at livia@creditdonkey.com. Follow us on Twitter and Facebook for our latest posts.

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