By Charles S. Gascon, Regional Economist
For the past five years the pace of job growth in the Eighth Federal Reserve District has generally been below the national rate. However, a closer look at trends in the District’s four largest metropolitan statistical areas (MSAs) paints four very different pictures.1
St. Louis, the largest MSA in the District, saw its job growth stall for about a year toward the end of 2011, largely due to job losses in the construction, retail trade, and professional and business services sectors. Recently, the job growth trends of these sectors have reversed, and these sectors, along with the financial services sector, have helped increase the pace of growth in St. Louis, albeit to a level still below the national rate.
The Louisville MSA employs the second-most workers in the District, just under half the amount in St. Louis. Thanks to a strong rebound in durable goods manufacturing employment (notably auto-related), the Louisville economy has experienced job growth at a pace much faster than the national rate, and employment is already above its prerecession peak.
Memphis, on the other hand, experienced a much deeper recession than the other three MSAs and as a result continues to have a relatively high unemployment rate at around 8 percent. Nonetheless, there are signs that growth in Memphis’ education and health services sector and professional and business services sector, along with a rebound in construction jobs, will help Memphis return to its prerecession peak level of employment.
The fourth largest metro area in the Eighth District is Little Rock, the capital of Arkansas. Due to a greater share of government workers than the other MSAs and strong growth in the education and health services sector, the impact of the recession on job losses in Little Rock was less severe than that of the nation. However, due to fiscal austerity during expansion, the government sector has experienced flat-line growth resulting in Little Rock failing to achieve the same job growth rate as the nation. Nevertheless, employment in Little Rock is close to surpassing its prerecession peak.
1 See the January 2014 District Overview in The Regional Economist, “Engines of Growth Vary in Four Largest Cities,” for more information on the key drivers of growth in these four metro areas.