2015 How We Pick the Best Cities for Job Growth

The methodology for our 2015 ranking, which seeks to measure the robustness of metro areas’ growth both recently and over time, largely corresponds to that used in previous years, with a minor addition to mitigate the volatility that the Great Recession has introduced into the time series. It allows the rankings to include all of the metropolitan statistical areas (MSAs) for which the Bureau of Labor Statistics reports monthly employment data. They are derived from three-month rolling averages of U.S. Bureau of Labor Statistics “state and area” unadjusted employment data reported from November 2003 to January 2015.

The data reflect the North American Industry Classification System categories, including total nonfarm employment, manufacturing, financial services, business and professional services, educational and health services, information, retail and wholesale trade, transportation and utilities, leisure and hospitality, and government.

We used five measures of growth to rank MSAs over the past 10 years. “Large” areas include those with a current nonfarm employment base of at least 450,000 jobs. “Midsize” areas range from 150,000 to 450,000 jobs. “Small” areas have as many as 150,000 jobs. This year’s rankings reflect the new Office of Management and Budget definitions of MSAs for all series released after March 2015. As a result, the MSA listed in this year’s rankings do not necessary correspond directly to those listed in prior years. In some instances, MSAs were consolidated with others — for example Pascagoula, MS, was combined with the Gulfport-Biloxi, MS, MSA to form the new Gulfport-Biloxi-Pascagoula, MS, MSA. Others were separated from previously consolidated MSAs and in still other instances individual counties were shifted from one MSA to another. The bottom line is that this year’s rankings are based on good time series for the newly defined MSAs but may not be precisely comparable to those listed in prior years. The total number of MSAs included in this year’s rankings has risen from 398 to 421. This year’s rankings reflect the current size of each MSA’s employment.

The index is calculated from a normalized, weighted summary of: 1) recent growth trend: the current and prior year’s employment growth rates, with the current year emphasized (two points); 2) mid-term growth: the average annual 2009-2014 growth rate (two points); 3) long-term momentum: the sum of the 2009-2014and 2003-2008 employment growth rates multiplied by the ratio of the 2003-2008 growth rate over the 2009-2014 growth rate (one point); 4) current year growth (one point); and 5) the average of each year’s growth rate, normalized annually, for the last 10 years (two points). This methodology corresponds exactly to that used in last year’s rankings. The goal of our methodology is to capture a snapshot of the present and prospective employment outlook in each MSA, and these revisions allow the reader to have a better sense of the employment climate in each.