Regional Monthly Workforce Indicators

Kansas City’s employment declined by 700 jobs in December, a change from November (+2,100 jobs) and October (+5,500 jobs). While job growth has been steady over the past year, this month’s decline in job growth may be a sign of a change in the labor market. The Federal Reserve’s rate increases may finally be slowing the labor market, though a single month’s data is not a trend.

Kansas City has now recovered 94% of the 139,300 jobs lost by the COVID-19 recession. The metro needs to recover another 7,700 jobs to return to the pre-pandemic peak from January 2020.

Employment — Seasonally adjusted

This graph shows the current number of jobs in the Kansas City metro as determined by the monthly Current Employment Statistics survey. Seasonal adjustment is a statistical technique that attempts to measure and remove the influences of predictable seasonal patterns to reveal the underlying trend in how employment and unemployment change from month to month.

Kansas City remained 8th overall in annual employment growth out of our 11 benchmark metros.

Employment increased 2.1% over the past 12 months for the Kansas City metro. While this rate is in line with long-term trends for the region, it is significantly below the 3.9% growth rate achieved by the median benchmark metro, Denver, and less than half as fast as the leaders, Raleigh (5.3%) and Charlotte (4.9%).

The seasonally adjusted unemployment rate remained at 2.7% in December, which is below historical averages and continues to suggest a tight labor market.

The unemployment rate remained tight at 2.7% despite the loss of 700 jobs in December. Among benchmark metros, Kansas City’s unemployment rate is second only to Minneapolis (2.2%).

Unemployment rate — Seasonally adjusted

Industry employment growth differed by industry sector, with some industries showing robust growth while others showed losses. Services continued to lead the region’s employment gains over the past 12 months, especially Health Services & Private Education (+9,400 jobs) and Professional/Technical Services (+6,100 jobs). Among goods-producing industries, Mining, Logging, and Construction performed the best (+4,000 jobs), followed by Manufacturing (+2,100 jobs).

Retail Trade and Financial Services continued their decline. Retail trade lost 1,400 jobs in the 12-month period while Financial Services lost 1,100 jobs over the same period. 

Average private hourly earnings (wages) saw a slight decline from November to December. Average wages declined from $30.10 in November to $29.98 in December. While a decline of $0.12. doesn’t seem like much, it marks a sharp change from the prior five months when wages were rising rapidly. During the past year, the Kansas City area’s average private sector wages increased by 3.2%, which ranks 7th among benchmark metros.

The past year’s performance represents a modest improvement when compared to earlier in the pandemic recovery when the region’s wages declined on average and ranked last (11th) among the benchmark metros in wage growth. Measured from January 2020, Kansas City’s private hourly earnings have increased by 4.57% and, as a result of the improved performance in the past 12 months, now ranks 10th among the benchmark metros in post-pandemic wage performance.

Each month, we provide data on jobs that have been most in demand in a key regional occupational sector based on employer job postings.

The Federal Open Market Committee (FOMC) of the Federal Reserve Board has been raising rates to tamp down inflation. So far, the primary effect has been on the housing market where increased mortgage costs have caused housing starts and home prices to stabilize and, in some markets, to decline. Absent rising prices, investor demand for housing has also declined, resulting in declining rents as well. Additionally, supply chain pressures that boosted the price of things like used cars and gasoline have moderated. The one component of consumer purchases that has yet to see a decline in inflation is services. So long as the labor market is tight and wage growth remains strong, this component is not likely to see substantial declines in inflation.

In December, Kansas City saw a decline in employment and wages.  This may mean the desired labor market loosening has begun.  It will take several months more of consistent data to know for certain, however. 

Last updated Feb. 7, 2023

The Monthly Workforce Indicators offer a look at the regional workforce including both seasonally adjusted employment and unemployment, employment by industry and the region’s employment growth ranking against 10 peer metros.