The geography of employment in the U.S. is being shaped by two distinct trends. The first is low levels of housing churn and, therefore, interstate migration, a normal part of the business cycle that should eventually turn around. More consequential are signs that artificial intelligence is beginning to suppress hiring in some of the most technology-centric parts of the country such as the San Francisco Bay Area ¡ª a shift that may portend a structural change in the labor market.
This is a useful time to look at changes in employment growth in different parts of the country and compare these with the pre-pandemic economy, since overall job growth is currently only a touch lower than it was in 2019. U.S. employment grew 1.2% in April from a year earlier, close to the 1.3% growth seen in 2019.
Let¡¯s start with the reduced migration from cold states to warm states that is showing up in the employment data of the metros most affected. House prices are a useful proxy for interstate migration. The two large metros with the weakest home price growth are Dallas, Texas, and Tampa, Florida, according to the S&P CoreLogic Case-Shiller indices. Employment in Dallas grew 1.4% in March from a year earlier, roughly half its 2019 pace, while in Tampa, it grew just 0.9%, a third of its 2019 pace. Reduced outmigration from the Northeast and Midwest, on the other hand, helps explain why job growth is above the pre-pandemic pace in Buffalo, New York and Pittsburgh, Pennsylvania.
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