Cities to rebound, but job growth stunted

By Julianne Pepitone, staff reporter

NEW YORK ( -- The economies of many cities will begin to rebound in 2010, but a full recovery is far off, especially for the labor market, said a metro area outlook report released Wednesday.

The report, from United States Conference of Mayors, forecasts the economies of 363 metro areas. It said the jobless rate was up more than 50% over the year in almost one-third of cities as of November.

"The recession ... was truly widespread and a tremendous burden in many metropolitan areas across the nation," the report said, calling metro areas "the nation's economic engines."

It noted cities make up 86% of U.S. employment and 90% of output, "so it comes as no surprise that the nation's economic centers were very badly damaged by persistent job cuts and surging unemployment through 2009."

The report predicted the nation's unemployment rate will peak in the first quarter of the year, averaging 10.2% between January and March compared with 4.9% in 2008.

Regional difficulties: The West, Southeast and Upper Midwest regions of the country have been particularly hard hit, the report said.

Four states contain 22 of the 25 cities with the highest unemployment rates: 11 in California, seven in Michigan and two each in Illinois and Florida.

"Unemployment has skyrocketed in these areas, because they have been hit particularly hard by the correction in the real estate market and/or are heavily dependent on the manufacturing sector," the report said.

On the other side, the Plains and Mountain regions have been somewhat "insulated" from the worst of the recession because the housing bubble did not hit these areas as hard as others.

Outlook: The report said some economic indicators have improved, including data on exports, consumer spending and income. But the labor market will take longer to recover.

Because cities contain a large percentage of the U.S. population and comprise much of the economic activity, the report said states should be investing more of their stimulus money in metro areas in order to bolster the overall economy. To top of page

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