By Dave Gatton
July 4, 2011

U.S. cities and their metro regions will see a projected slow but steady improvement in unemployment rates in the coming years, even though those rates will remain stubbornly high well into the future, according to the U.S. Conference of Mayors annual U.S. Metro Economies Report released at the conclusion of its 79th annual meeting in Baltimore June 20.

Through April 2011, 103 (28 percent) of the nation’s 363 metro economies faced double-digit unemployment rates, down from 150 (41 percent of all metros) a year ago. Thirty-three metros currently have rates higher than 12 percent, half the total of 66 from the same time last year.

The report, prepared independently by IHS Global Insight Inc., the nation’s leading economic forecasting firm, projects that by the end of this year 75 metros will still have double-digit unemployment rates, and 193 metros (53 percent) will have rates higher than eight percent.

Global Insight also forecasts that most metro areas will suffer persistently high unemployment beyond 2011, many of which will continue with high rates into the middle and latter part of the decade. At the end of 2007, prior to the recession, only 50 metros economies had jobless rates above 6 percent. By the mid-point of the decade (2015, however, the report forecasts that 198 metros (55 percent) may still suffer unemployment rates above 6 percent.

On the national front, job growth in 2011 will reach just 1.2 percent, only a bit higher than the underlying labor force growth, resulting in an unemployment rate that only slowly retreats from its current rate of 9.1 percent.

Mayors used the sluggish job growth forecast to call for expedited and increased funding for infrastructure development, passing resolutions calling for creation of an infrastructure bank and more investment in alternative energy, water, and wastewater infrastructure in the nation’s cities.

The report also included the annual release of Gross Metropolitan Product numbers for the nation’s metro economies.

New York ranked first with a 2010 GMP of $1.28 trillion, followed by Los Angeles ($738 billion), and Chicago ($531 billion).

In 2010 U.S. metro economies accounted for 89.8 percent of the nation’s gross domestic product and wage income, and 85.7 percent of all jobs — slightly down from 2008, but still the overwhelming majority of national economic output and wage income.

Following consecutive years of decline in 2008 and 2009, total real GMP increased by 3.1 percent in 2010, with 347 (96 percent) of metros experiencing GMP increases — a stark contrast to the previous year’s performance when 280 metros saw it fall.

U.S. metros also maintained their global economic leadership in 2010. Of the 100 largest economies in the world, 37 of them belong to metro areas of the United States. New York’s metro ranks as the 13th largest economy in the world when compared to other nations; Los Angeles ranks 18th and Chicago second.

The full report can be found on usmayors.org/metroeconomies/2011.