Economy Watch: Metro Area Employment Stronger (Mostly)
A lower employment rate could spell good things for the real estate industry.
By Dees Stribling, Contributing Editor
More detail about the U.S. employment picture: the Bureau of Labor Statistics also reported just before the Independence Day weekend that most metro areas nationwide had lower unemployment rates in May than a year earlier. That counts as good news for many real estate markets nationwide, since the industry tends to be intensely local. It’s all well and good that the U.S. employment rate is 5.3 percent, the lowest it’s been in years, but if your Metropolitan Statistical Area rate is 8 percent or 9 percent or more, offices won’t be leased, retailers will continue to suffer, and even apartments might be hard to rent.
Unemployment rates were lower in May than a year earlier in 346 of the 387 metro areas, higher in 36 areas, and unchanged in five areas, the BLS said. Twelve charmed areas had jobless rates of less than 3 percent, while nine luckless ones had rates of at least 10 percent. Also, payroll employment increased since last year in 319 metro areas, decreased in 63 areas, and was unchanged in five. A total of 183 areas enjoyed May unemployment rates below the U.S. rate, while 191 areas suffered rates above it, and 13 areas were equal to that of the nation.
Mostly larger MSAs had rates away from the extremes, with smaller places at both ends of the employment spectrum. For instance, Lincoln, Neb., and Ames, Iowa, had the lowest unemployment rates in May: 2.2 percent and 2.3 percent, respectively. On the other end, Yuma, Ariz., and El Centro, Calif., had the highest unemployment rates: 23.1 percent and 21.3 percent, respectively. Of the 51 metropolitan areas with a 2010 Census population of 1 million or more, Austin-Round Rock and Salt Lake City had the lowest unemployment rates in May, 3.1 percent and 3.2 percent, respectively. Detroit-Warren-Dearborn; Las Vegas-Henderson-Paradise; Los Angeles-Long Beach-Anaheim; and Memphis had the highest jobless rates among the large areas, at 6.6 percent each.
What happens next in Europe, now that the Greeks have said NO! to more austerity? Will the euro FUBAR have some real impact on the U.S. economy? No one knows what will happen next. Not the Greeks nor the Germans nor the European Central Bankers nor economists nor think tanks nor U.S. Treasury Department officials nor financial journalists nor even real estate columnists. All bets are off, since this is new territory for modern economies. Some people will probably suffer, others will line their pockets. Some other possibilities: stock markets will be upset enough to cause the correction that’s been predicted, especially on the U.S. exchanges, for a while now; dollar-toting tourists will get a break in euro-zone countries, and the dollar strengthens more (which would be bad for American exporters if it persists); and the Fed might well decide that virtual zero’s a dandy rate for the rest of the year or longer.