The end of March was an important time for data geeks and economists alike – the Bureau of Labor Statistics (BLS) released their annual benchmark revisions for Metropolitan Statistical Area (MSA) employment for 2015. The revisions added additional information not available at the time of the sample-based estimates and provided a more accurate depiction of the employment situation. On a national level, the employment picture was better than anticipated with re-benchmarking showing a net gain of 85,000 more jobs added than previously reported for 2015. Since housing is local, we dug into the metro-level data so you can review the changes for the markets you operate in.
Metro-level data is often more vulnerable to errors than at the national level since the initial estimates are based on a smaller sample size. Across the MSAs, 52% had upward revisions and 48% had downward. Below we show the revision to 20 top metros across the US, comparing the initial estimate for total employment in December 2015 to the benchmark adjustment for the same period. We also show the employment growth for the given metros, which shows that even the markets that had downward revisions still added jobs year-over-year.
Some Good News For Chicago.
Initial estimates showed total employment for Chicago at 4,588,200 in December 2015, but the revisions added 52,000 jobs. The upward correction was welcome news to Chicago, a metro that still has been struggling since the Great Recession. Despite the upward revision, job growth in the metro lags behind the rest of the nation. As of February, Chicago’s employment market grew at a modest 1.2% annual clip. In addition, the unemployment rate is 100 basis points higher than the national rate. Besides lack luster jobs figures, high taxes and the unfunded pension problems are causing dissatisfaction among local residents. Data from the U.S. Census Bureau showed Chicago lost 6,262 residents in 2015, the highest level of any metro. Weaker consumer confidence and uncertainty around the government woes negatively impacts the local housing market as more people sit on the sidelines. The silver lining for the Windy City comes from its desirability to Millennials, especially those living in nearby Midwest states. Chicago provides a relatively affordable urban lifestyle and access to a burgeoning tech center. Illinois now ranks 7th in the US for total tech employment, an attractive industry to Gen Y-ers.
Diversity Is Key In Dallas.
The upward revision of 24,500 jobs for Dallas just confirmed the strength of the local economy. The North Texas market is still very good, and the economic diversity has kept it well-insulated from the negative effects of oil. Dallas is seeing job growth across a broad spectrum of industries, including health care, IT, finance, and construction. The unemployment rate is sub-4.0% and year-over-year job growth is close to 3.5%. Senior Vice President Kimberly Byrum states, “Momentum, particularly in the Dallas-Plano-Irving Metropolitan Division, remains stable with current growth tracking year-over-year numbers consistent with the last twelve months.”
Strength in the local economy is not expected to falter any time soon, especially with corporate consolidations (think State Farm, Toyota, and Liberty Mutual) bringing jobs to the metro and propping up the local housing market. In addition, newly educated graduates are moving to the city to take advantage of the strong labor market; Dallas ranked in the top 10 for cities where out-of-state graduates are moving.
Back To Reality For Baltimore.
In Baltimore, local experts agree the downward revisions seem more in-line with reality. Kevin Gillen Ph.D., our Chief Economist, explains, “Baltimore continues to remain a highly challenged market, despite the fact that many other US cities are experiencing a renaissance in urban living. Baltimore’s current predicament is not the result of outside forces, but is self-inflicted. Until it gets serious about addressing its fundamental problems, it will remain a slow growing market.” Baltimore’s reputation and economy took a hit last year after riots captured national attention. In addition, budget cuts have resulted in a drop in government jobs. Skittish consumers have considered leaving the region for better schools and a safer place to live. In response, more than two dozen businesses in the metro, including Baltimore Gas, Electric Company, and Under Armour, have agreed on a $69 million initiative to help the local economy and boost employment growth over the coming years.
Strength Unfaltering in California.
Los Angeles and San Jose were hit with steeper than expected downward revisions. Still, both markets grew year-over-year in December by 2.4% and 5.1%, respectively. “The revisions in Los Angeles (-32,500) and San Jose (-12,900) are normal and still show solid job growth in 2015,” explains Peter Dennehy, our Senior Vice President of Advisory. He continues, “These have been two of the top performing metros across the country for the past few years.”
If you have any questions or would like to see the full list of MSA revisions, please contact Ali Wolf, Manager of Housing Economics.