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3 Cities Where Unemployment Is Rising and 3 With Big Job Gains

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The U.S. Bureau of Labor Statistics recently published unemployment data for March, indicating that most of the country is continuing to dig out from the Great Recession. Of the 49 major metropolitan areas in the U.S. (those with at least 1 million residents in 2000), the unemployment rate dropped in 45, held steady in one, and rose in just three. Chicago, Memphis, and Indianapolis were the three cities to experience rising unemployment in their metropolitan areas. By contrast, the unemployment rate declined by 2% or more in three metro areas, all of which are in Florida: Tampa, Orlando, and Jacksonville.

The biggest losers
In March, the biggest year-over-year jump in unemployment occurred in the Chicago metropolitan area, where the unemployment rate rose from 9% to 9.5%. This uptick parallels the worsening employment situation in Illinois more generally, as I discussed last month. In some parts of the U.S., the unemployment rate is rising because -- counterintuitively -- people are feeling better about their job prospects and thus returning to the labor force. However, this is not quite true for the Chicago metro area.  While the Chicago area's labor force did grow from 4.87 million last March to 4.9 million this year, the region also lost more than 12,000 jobs in that time span, leading to this year's higher unemployment rate.

Memphis and Indianapolis suffered smaller increases in the unemployment rate of 0.2% each. The Memphis labor force contracted by approximately 2,000, as people either moved away or gave up looking for work. However, employment dropped even faster, as the metro area lost more than 3,000 jobs in the past year. Memphis may be in for more hard times in the next year. FedEx (NYSE: FDX  ) , the area's largest employer, recently embarked on a major cost-cutting campaign that includes significant job cuts. FedEx's actions will help the company boost its efficiency as it faces a slowdown in demand, but it could have a major impact on the Memphis economy, because FedEx directly supplies nearly 5% of the region's jobs. FedEx has already offered buyouts to a variety of employees, who will leave the company beginning later this month and continuing through the rest of the year. FedEx has also deferred hiring for many open positions, depressing job creation.

By contrast, the Indianapolis metropolitan area has gained more than 2,000 jobs over the past year. Unemployment still rose by 0.2% in that period, because the labor force grew by more than 6,000. While job growth is clearly sluggish in the region, Indianapolis is still in better shape than Chicago or Memphis, since job growth is still positive.

The biggest winners
While a few major cities are experiencing rising unemployment and many others are recovering slowly, three of Florida's four major metro areas took the top spots in terms of year-over-year improvement for March. In the Jacksonville metropolitan area, unemployment declined by 2 percentage points, from 8.5% to 6.5%. The unemployment rate dropped by 2.1 percentage points (from 8.7% to 6.6%) in the Orlando metro area. Lastly, the Tampa Bay area saw the most improvement in the country, with the unemployment rate falling 2.2 percentage points, from 9.1% to 6.9%. Whereas all three of these metro areas had an unemployment rate above the national average of 8.2% in March, 2012, all three were below the national average of 7.6% in March, 2013.

Foolish bottom line
While there is always debate about why some areas prosper more than others, it is telling that the three most-improved metropolitan areas were all in Florida. In part, this could be the result of rebounding tourist demand. However, it's possible that recently implemented government policies in Florida designed to improve worker training and promote an investment-friendly business climate are working. In reality, Florida's rapid improvement can probably be attributed to a combination of these factors and pure luck. Whatever the cause of Florida's strong job growth, residents are surely glad that they're finally pulling out of the recession, unlike the Chicago and Memphis metro areas.

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Read/Post Comments (14) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On May 05, 2013, at 12:32 PM, Magicman12 wrote:

    Is this the same BLS that cant even count all the unemployed people correct?

    If you *stopped looking* for work your not unemployed? the BS is a bunch of BS.

    Also Roykokinasok Indianapolis is the largest city with a Republican Mayor and this article contradicts itself.

    Indianapolis gained 25,000 jobs and was in the top 10 for job creation in the past year.

    So how in the world does your unemployment rate increase when you create 25,000 jobs?

  • Report this Comment On May 05, 2013, at 1:18 PM, tdt2 wrote:

    the reason for my chicago's unemployment rise because of laid off city workers, teachers and corruption.this is why the murder rate is very high in my unfair city!if there were jobs i mean good paying ones.chicago residents would not be very angry and broke!there are some jobs in chicago but who wants to work a dead in job at age 35 that doesn't pay nothing and slaves along with working you to death!we want a new mayor!

  • Report this Comment On May 05, 2013, at 1:29 PM, tdt2 wrote:

    chicago's main employment force are the cps teachers,teacher aides and staff along with city city is laying them off!i'm very glad that rio won the 2016 olympic bid!how can my unfair city of chicago host an olympics or any other world event and my home very corrupt can't pay the teachers and other city employees?in chicago getting a job is based on who you know not how good your background is!

  • Report this Comment On May 05, 2013, at 1:43 PM, profitsB4patient wrote:

    businesses don't like losing money,so business moves to places that are business friendly,making money matters

    When you have self righteous politicians looking out for themselves and their multi platinum pensions,bankrupting the ppl and their communities and state ppl and businesses leave for a better business and job climate

  • Report this Comment On May 05, 2013, at 1:54 PM, 501Kid wrote:

    Chicago is an utter disgrace. I'm so sorry I ever moved here. Now I'm stuck and can't get out. There are NO JOBS! Everyone is either a crook or on welfare. There are illegal Mexicans EVERYWHERE! Mile after mile of empty lots, foreclosed houses, closed businesses. How does the city even pay their employees? Blacks gangs killing blacks over $10.00. Mexican gangs killing Mexicans over street "turf". Rich whites segregated into heavily patrolled up-scale neighborhoods. WHAT is going on here? This isn't funny! This city is really going to hell. Get out while you still can.

  • Report this Comment On May 05, 2013, at 3:03 PM, peterwolf wrote:

    Luck has nothing to do with Florida's employment gains, as the authors allude to. It is because the state has no state income tax and has a very friendly business environment. Contrast that with Chicago, New York, L.A., etc, with sky-high taxes and anti-business reputation. Case closed.

  • Report this Comment On May 05, 2013, at 3:37 PM, Acttorneyatliar wrote:

    Imagine that, creating a climate which is business friendly, mean tax incentives instead of tax increases on the supposed rich "you didn't build that" entrepreneurs, actually causes decreases in unemployment and increased government tax revenue! Who would have guessed?!!!

  • Report this Comment On May 05, 2013, at 3:59 PM, TMFGemHunter wrote:

    @peterwolf: I don't think that your logic can explain why Florida had unemployment above the national average last year. A business-friendly climate can help, but that alone doesn't guarantee economic growth.


  • Report this Comment On May 05, 2013, at 4:01 PM, TMFGemHunter wrote:

    @Magicman12: Based on my reading of the data, Indianapolis created a lot of jobs between early 2011 and early 2012. In the last year, job creation has been very modest (about 2000 new jobs), as I mentioned in the article. That's why the unemployment rate rose year-over-year.


  • Report this Comment On May 05, 2013, at 6:17 PM, mjc54 wrote:

    Is isurprising that Chicago is on the list? As corrupt as the city is it is no wonder that the unemployment rate is one of the highest. There is to much welfare and gang crime here. I am glad that we are getting out of the second city of trash. The only thing that will soon be left are the politicians and welfare recipients. What do you think will be left? The new Detroit. Just look at what Daley did and Rahm is doing now. Nothing ever changes.

  • Report this Comment On May 05, 2013, at 6:25 PM, ThisIsUnReal wrote:

    So Fool, If you want to understand unemployement and "end the debate"... study the unemployment rules from each State...

    In California, IF you worked in the last 18 months, you qualify for some level of unemployment... you continue to "be on unemployment" until you either get another job or run out of time which has a maximum of 6 months... I know people that haven't worked since Obama's speech in 2009 when he offered money to any company that can prove they need money... they haven't worked in 4 1/2 years, but don't qualify to be "unemployed"...

    Imagine a State where there isn't any time limit... their unemployment would probably be higher as more and more are added... Or a State where you can requlify after being off the program for 3 months... their new starts would be astronomical

    While you're at it look at what it takes to be on Food Stamps, and realize that 15% of America Qualifies for that!!!

    Bill Clinton may have started this recession with his repeal of the 1933 banking law, but Obama has heightened it to astonishing levels...

    The Democrats may have had this destruction of our country planned, but I can't believe any of them could have wanted this...

    Question to the "first generation" American Obamites: Why did you come here? When America is no better than any other country Where will you go? what about your friends and family... Only America and it's founding belief system makes his country the greatest country in the world... once that is Obamanated... there will be no where in the world that anyone can go to be everything that he or she wants to be!!! How can you support Obama?!?

    And to "Illegal Alien" Obamites: If you get amnesty, what happens to all your fellow countrymen that have been waiting for years to come here legally??? You cheated, they followed the rules, and YOU get to win?!? How is that a good thing?!? How can you support a guy that can be so mean and rude to you fellow countrymen?!? Selfishness maybe?!? What about you 30 and unders? what is the difference between you and the over 30's? Did you EARN your legality by being born later?!?

    It's ALL inconsiderate, rude and wrong... in other words "Of Liberal Mind"

  • Report this Comment On May 05, 2013, at 10:41 PM, jilluma wrote:

    I am moving to Florida, working and retiring there. End of story.

  • Report this Comment On May 07, 2013, at 10:32 AM, Publisher13 wrote:


    "So how in the world does your unemployment rate increase when you create 25,000 jobs?" This happens when people who are unemployed move into the area, hoping to snag one of those jobs. Indy and the suburbs have had an influx of people coming from (gasp!) Chicago and Illinois in general. They are fleeing high taxes and high crime. They stay with relatives or friends while they look for a job, and are counted with the area's unemployment rate because they are actively seeking employment, making them part of the U3 numbers. I guess having a Republican mayor and governor and a generally business-friendly climate is a magnet for people who genuinely want to work.

  • Report this Comment On May 07, 2013, at 2:44 PM, Magicman12 wrote:

    well Publisher13 I guess we can consider that a good thing then :) Leave the Liberal Hellholes before its to late haha.

    Do you happen to live in the Indianapolis area by the way? if so how many people do you know that live in Indy came from Chicago?

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