Remember when we used to talk about a V-shaped recovery. Yeah not so much. A new economic report commissioned by the U.S. Conference of Mayors, which is meeting this week, predicts that at least 50 metro areas, or about one-in-seven cities, in this country won’t see a return to pre-recession employment levels until 2020. Among the cities that could be the biggest laggards are a number of ones in Ohio – Cleveland, Dayton, Toledo – Reno and Atlantic City. Those cities may not see a full jobs recovery until 2021 or beyond. A number of cities in Michigan, including Detroit, face a tough road back as well.
Many people have said that the unemployment rate could be a key to Obama’s chance of re-election. So, many people have been watching and predicting what it could be by the end of 2012. The mayors’ analysis predicts that of the 363 metro areas in the report 75 will still have double-digit rates of unemployment by the end of the this year. Overall, IHS put the unemployment rate at 8.6% at the end of 2011, and says that gauge won’t go below 8% until sometime in 2013. Unsurprisingly, given the group, the report also makes the case that cities are the most powerful engines of jobs growth in the country. Nonetheless, this is something that a number of economists have been saying for a while. IHS estimates that over 85% of the jobs created in this country in the next five years will be in cities.
And the report does seem to be too rosy in some of its predictions. It forecasts the economy will stage a major second half rebound, with the economy growing at 3.5% in the last six months of the year, up from 1.9% in the first half. That, as I have pointed out before, is probably unlikely.
But an interesting thing you can see from this report, which was put together by economic forecasting firm IHS Global Insight, is that the job recovery could be a very different experience for many people around the country. In New York, employment is supposed to regain its pre-recession level by the middle of 2013. That means the job market in the Big Apple will probably feel pretty healthy by the end of 2012. However in Los Angeles, the jobs market is not supposed to return to its peak until mid 2018. So Los Angeles votes are likely to still be pretty unhappy with Obama, at least when it comes to the economy, when they head to the polls next year.
But even in places that were hit pretty bad by the housing market are expected to have rather normal jobs markets by the end of next year. San Diego is expected to get back to its jobs peak by 2014. Miami; by 2015. And these are jobs peaks. Hiring should come back long before that. I can’t see any pattern to what types of cities do better than others. But the mix, and how large they are, and if they are in swing states might matter more for Obama than the over all jobless rate.