2016 How We Pick the Best Cities for Job Growth

The methodology for the 2016 rankings largely corresponds to that used in previous years, which emphasizes the robustness of a region's growth both recently and over time, 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 2004 to January 2016.

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.

This year's rankings use five measures of growth to rank all 421 metro areas for which full data sets were available from the past 15 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 2016.  In the year-to-year comparisons, four of the MSAs grew enough over the last year to be reclassified from “Small” to “Midsized.” For each of these four, the year-to-year comparisons by comparing their position this year to where they would have ranked last year if they had been included in the “Midsized” category.

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 2010-2015 growth rate (two points); 3) long-term momentum: the sum of the 2010-2015 and 2004-2009 employment growth rates multiplied by the ratio of the 2004-2009 growth rate over the 2010-2015 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 ten years (two points).  This methodology corresponds to that used in last year’s rankings.  The goal of the rankings methodology is to capture a snapshot of the present and prospective employment outlook in each MSA.