Despite grim data, some signs indicate overall economic improvement

May 05, 2022
| Posted in
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The Kansas City economy has recovered 80% of the 139,300 jobs lost from the recession. The Kansas City metropolitan economy needs to recover another 27,200 jobs to return to the pre-pandemic peak level of employment. In March, seasonally adjusted employment decreased by 3,100 jobs, removing much of the job gains for the previous two months (5,300 jobs in January and 1,700 jobs in February). Job gains in the past year have been uneven but overall showed improvement over the period. The unemployment rate declined from a revised 3.5% to 3.4%, a modest improvement over the previous month.

Kansas City ranks last overall in the 12-month period among our ten other metro peers with a 12-month employment growth rate of 1.5%. Although the initial effects of the downturn were less severe to Kansas City than some of our peers, Kansas City’s recovery has been slower than others, far behind peers such as Austin (8%) and Nashville (6.3%).

Leisure and Hospitality continues to have the strongest recovery given they had the most to regain. Over the past 12 months, job growth in Leisure and Hospitality increased by 12,300 jobs. Other sectors that saw large 12-month growth include Professional/Technical Services up 3,400 jobs and Mining, Logging, & Construction up 2,900 jobs. Industries that saw losses over this period include Manufacturing, down 2,600 jobs, Financial Services, down 2,500 jobs, and Management of Companies, down 1,000 jobs.

As the annual revision in employment by BLS has shown, Kansas City has struggled relative to its peers during the recovery. Likely growth will continue to be a challenge in 2022 from rising interest rates, a tight labor market, high inflation, supply chain issues and the uncertainty from the Russian invasion of Ukraine. Although the data looks grim, there are some signs that the economy may be improving. Job posting data, which is the only data in the dashboard that is not lagged by two months, shows a clear uptick, suggesting that employers are looking to hire more workers. Hopefully, this uptick will translate into improvements in employment in the Kansas City area.