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Economic Recovery Continues to Slow Among Most Major Markets

Economic Recovery Continues to Slow Among Most Major Markets

Employment losses remain steep in most major markets, and economic recovery has slowed, paused, or in some cases, reversed, in some of the nation’s top metropolitan areas.

Increasing COVID-19 infection rates and the resulting re-imposition of restrictions on businesses and residents has slowed economic recovery across the U.S. After a few months of smaller markets (mostly college towns) reporting moderate job gains, September’s job report showed losses for all core 150 markets tracked by RealPage.

The list of markets with the steepest annual job losses was unchanged from last month, with all markets returning to the list and in the same order. According to the Bureau of Labor Statistics (BLS), New York is still seeing the steepest job losses with about 835,000 positions cut in the year-ending September 2020. Additionally, the rate of improvement in this market has slowed since bottoming out at 1.4 million jobs lost in the year-ending April.

Los Angeles, Chicago, Boston, Philadelphia, and Detroit saw only slight improvements in their job loss totals for the year-ending September. These markets reported annual job losses of around 200,000 to 440,000 positions in September.

Washington, DC’s annual loss of 191,400 jobs in September was a slight improvement over the 201,400 lost in the year-ending August. As a result, only six markets posted annual losses of more than 200,000 jobs in September, one less than last month.

Anaheim and Houston each lost about 160,000 jobs in the year-ending September, while Minneapolis-St. Paul posted an annual loss of about 137,000 jobs. Both markets saw an improvement over August’s annual losses.

Of the 10 hardest hit markets, Los Angeles has seen the weakest recovery since April, regaining only about 30% of the initial annual job loss seen in the year-ending April. Detroit has regained about half of the jobs lost initially, while the remainder of the list averaged about a 43% improvement. While the jobs data reported by the BLS for this report is not seasonally adjusted and month-to-month comparisons can be difficult, utilizing annual totals moving by month can still provide some insight.

A total of 110 of the core 150 markets had fewer jobs lost in the year-ending September than in August, three less than last month. Stricter economic and business controls are hindering the recovery.

A few markets logged steeper job losses in September. Urban Honolulu saw increased annual job losses from August by almost 12,000 jobs, while Orlando and Baltimore lost about 6,000 additional jobs in September compared to last month. Other major markets with additional job losses include Oklahoma City, Indianapolis, and St. Louis.

Despite increased job losses in a few markets, 20 markets lost at least 100,000 jobs in September’s report compared to 22 markets with similar losses last month, and 49 markets in April. Twenty-four markets lost between 50,000 and 99,999 jobs compared to last month’s 25. Combined, the jobs lost in the 10 worst markets accounted for 30.5% of the total losses for the U.S. The next 10 markets for job losses accounted for another 12.6% of total job losses.

As with the list of markets with the steepest job losses, the list of steepest percentage change in employment has many returning entries. According to the BLS, New York, Las Vegas, and Oakland were the returning major markets on the list for steepest job loss as a percentage of total employment for September 2020.

Except for Urban Honolulu, the range of percentage job losses continues to progress each month with an improvement of about 20 to 30 basis points (bps) from the lowest to highest on this month’s list. Last month’s list had percentage losses ranging from 11.7% to 12.9%, while the markets on September’s list range from 10.4% to 12.5%.

Hawaii’s Urban Honolulu market again leads this month’s list with a 16.3% decrease in employment from last year, 230 bps greater than last month, as the state’s strict quarantine restrictions and remote accessibility continue to hammer the local economy.

Even the markets that have thus far been the least affected by the lockdowns and economic turmoil, such as those anchored by large universities or government/military employment centers, have returned to annual job losses. However, annual loss rates are minor compared to many other markets around the country. The largest markets with milder job losses include Salt Lake City (-1.6%), Chattanooga (-1.7%), Austin (-2.5%), Dallas (-2.8%), and Phoenix (-2.9%).