The U.S. economy added a disappointing 235,000 jobs in August, but Nashville landed in the top 5 of a national list of best-performing job markets.
Nonfarm payroll growth in August increased by just 235,000, the Labor Department reported Friday, vs. expectations of 720,000 new hires. The 235,000 compared to 943,000 jobs that were added in July.
Despite the disappointing national numbers, Nashville comes in at No. 4 in rankings of the top metro labor markets by Dallas-based workforce analytics company ThinkWhy.
The report calls Music City a “chart topper”:
“Most of the metro areas surrounding Nashville are also showing very strong performance and will be in the first wave to reach their previous employment numbers. This is important because of how much neighboring economies depend on each other.
“Due to strong population movement to these areas, a substantial labor force has been maintained while other areas of the country simply have less available talent than before the pandemic.”
Out of 150 U.S. metros, Nashville ranks in the top 25 for job gain, job growth, average hourly wage growth, net migration and working-age population growth. The area has landed in the top 10 for four consecutive months, up from No. 46 a year ago.
For the U.S. to get back to its pre-pandemic employment level by December 2022, an average of 313,000 jobs would need to be added per month, according to the ThinkWhy analysis.
Job openings remain at record highs, with more than 10.1 million open positions in the U.S.
Businesses are eager to capture market demand and are expanding hiring budgets to meet increasing wages and fill open roles, but still cannot hire employees quickly enough, the ThinkWhy analysis says.
The primary challenge ahead for the labor market will be disruption caused by the rapid increase of coronavirus counts as it threatens the near-term pace of job gains, said Jay Denton, chief analyst for ThinkWhy, which makes talent intelligence software.
“Caution flags are flying,” Denton said. “If gains continue at this type of pace, it puts the U.S. economy in serious jeopardy for a full recovery by late 2022 or early 2023.”
The U.S. labor market has made substantial headway recouping 17 million of the 22.4 million jobs lost during the pandemic, but the recovery has varied significantly based on location and economic performance, according to ThinkWhy’s proprietary LaborIQ Index, which tracks 10 key performance indicators that measure and rank a local economy’s performance.
The top five best-performing U.S. labor markets, in order, are:
Dallas-Fort Worth-Arlington, Texas
Phoenix-Mesa-Scottsdale,
Arizona Austin-Round Rock,Texas
Nashville-Davidson-Murfreesboro-Franklin,
Tennessee Denver, Aurora-Lakewood, Colorado
Strong net migration has fueled the labor force, but even with rising populations, talent supply cannot keep up with demand, Denton said. In turn, the demand-supply imbalance is putting pressure on wage growth.
“The tank of talent supply will start to run empty for metros and industries in the first wave of the recovery,” he said. “Look for some locations in the Southeast, Texas, and Midwest to begin searching more frequently for talent outside their metro because as they become magnets for relocation.”
