"Explosive Growth": Nashville, Austin Job Markets Are Hot, Hot, Hot
The sunbelt cities of Nashville, Tennessee, Austin, Texas and Jacksonville, Florida are among the hottest job markets in the country right now, according to an assessment of 380 metro areas conducted by the Wall Street Journal and Moody's Analytics.
Those Sunbelt cities benefited from a continued recovery in travel and a hiring boom at restaurants, hotels and music venues, consistent with the resurgent services sector driving the U.S. economy in recent months. Many remained relatively affordable as high inflation gripped the nation. Meanwhile, some Western job markets that heated up after the pandemic took hold—including Salt Lake City, Phoenix and Denver—cooled last year. -WSJ
The rankings were based on five factors; the unemployment rate, labor-force participation rate, how employment levels have changed, the size of the labor force, and 2022 wages - all of which were used to determine the strongest labor markets in the country.
Last year and into 2023, employers added jobs across the country, while the unemployment rate hit a 53-year low of 3.4% in January, which ticked up to 3.6% in February.
Contributing to the #1 spot for Nashville as the nation's hottest job market is the labor-force participation rate, which ranked #3 in terms of the share of adults working or looking for jobs. Austin came in at #2, touting the strongest labor-force participation among large metro areas.
These fast-growing Southern state capitals with vibrant music scenes have drawn in many new workers and companies in recent years. Investment firm AllianceBernstein LP opened its new corporate headquarters in Nashville last year. Elon Musk’s electric-car maker Tesla Inc. moved headquarters to Austin in 2021, and he is laying plans for a new community outside of Austin, next to facilities of Boring Co. and SpaceX, two other companies he controls.
Jacksonville edged up in the rankings last year, becoming the third-hottest job market, after placing sixth a year earlier based on revised 2021 data. The region, positioned as a logistics hub in northern Florida, has been a magnet for remote workers and new companies during the pandemic, said Mike Brady, owner of two Express Employment Professionals staffing offices in Jacksonville. Affordable homes and Florida’s lack of state income tax are two big contributors, he said. -WSJ
"There has been explosive growth," said Brady. "We’re still seeing warehouses being built. We’re still seeing companies move in."
According to Brady, the surge in demand has been hard to meet.
"If we place somebody on a job, and they don’t like the job, then they will just simply go to another job," he said.
In Jacksonville, FL, employers are hiking wages - causing the city's weekly wages to grow at the fourth-fastest rate of any large metro area in 2022. Miami, meanwhile, logged the nation's largest wage gains, according to the report.
What's more, the cost of living is relatively (emphasis on 'relatively') low compared to many coastal cities competing for tech and finance workers. That said, costs are rising - particularly housing costs, in several major Sunbelt cities.
If current trends persist, Dallas, Texas is set to surpass Chicago as the 3rd largest metro area in the US by 2040.
Other cities which made notable gains in this year's rankings include New Orleans, Orlando and Las Vegas, where more workers returned to the labor force last year - filling job vacancies at restaurants, bars and hotels. As the Journal notes, "In the U.S. as a whole, employers in leisure and hospitality have been on a hiring spree, driving a surprisingly resilient labor market in the face of rising interest rates and high inflation."
Meanwhile, New York was among 'the few large metros' which lost workers from its labor force last year, while Los Angles experienced above-average unemployment and below-average wage growth.