15 Jul 2021
Posted in Business Fundamentals
Las Vegas, Kahului-Wailuku-Lahaina and Atlantic City to record sharpest declines in unemployment rates in 2021, says GlobalData
US cities are experiencing a surge in employment as reopening initiatives, rising vaccination rates and low daily cases have given businesses confidence. In fact, unemployment rate in all 382 metropolitan regions tracked by GlobalData is expected to decline in 2021 as compared to 2020. The sharpest declines will be seen in the tourism and hospitality driven areas such as Las Vegas, Kahului-Wailuku-Lahaina and Atlantic City, according to economic research by GlobalData a leading data and analytics company.
Kausani Basak, Economic Research analyst at GlobalData, comments: “It’s business as usual for almost all US states, which has helped restore employment. US metropolitan areas where travel and tourism are a major employment generator recorded the highest rise in unemployment in 2020. In 2021, GlobalData forecasts the unemployment rate in Las Vegas to drop by 8.3 percentage points, while Kahului-Wailuku-Lahaina sees an 8.1 decline and Atlantic City falls by 7.9.”
Basak continues: “According to GlobalData estimates, unemployment rate in San Francisco and San Jose are expected to decline to a respective 7.4% and 6.3% in 2021, as compared to 8% and 7% respectively in 2020. Employment in these areas is expected to be driven by robust investments in technology start-ups, buoyed by strong investor confidence and fiscal stimulus support. The Biden administration’s plan to allocate $100bn for developing a high-speed broadband infrastructure across the country is expected to provide further impetus to the economic recovery.”
The biggest US metropolitan regions such as New York, Chicago and San Francisco, which also saw the strictest COVID-19 restrictions, have swiftly reopened. For example, Chicago became the first large city in the US to lift restrictions entirely in June 2021. At the same time, vaccination coverage has been increasing, with the counties of New York and San Francisco fully vaccinating a respective 70.2% and 73.8% of their populations above 18 years of age. According to GlobalData, unemployment rates in these major employment-generating cities are forecast to decline, with New York seeing a decrease to 9.8% and Chicago seeing reductions to 9.1% in 2021 (from 10.4% and 9.8%, respectively, in 2020).
Basak concludes: “Strong business sentiment and an invigorated external sector will bolster the labour market in 2021. The travel and tourism, healthcare, pharma, retail, and technology sectors are expected to witness the largest rise in employment. However, US’s strong start to its vaccination program has lost steam in recent weeks due to vaccine hesitancy. At the same time, new variants of the virus, and a possibility of resurgence of infection rates due to lax social distancing protocols, are a major threat to sustained recovery prospects.”