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 Corporation (NYSE:FDX), the area’s largest employer, recently embarked on a major cost-cutting campaign that includes significant job cuts. FedEx Corporation (NYSE:FDX)‘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 Corporation (NYSE:FDX) directly supplies nearly 5% of the region’s jobs. FedEx Corporation (NYSE:FDX) 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 Corporation (NYSE:FDX) 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.