The Phoenix metropolitan area has been ranked number 2 among the top five best job markets, according to Dallas-based SaaS company, ThinkWhy, with a focus on their AI-generated LaborIQ software targeting labor market solutions.
While job openings are standing firm at record highs with over 10.1 million available jobs in the United States. Companies are looking to capture the demand this market has created a need to expand headcount budgets to meet rising wages in order to fill these openings, but are still struggling to hire workers fast enough. As with anything these days, Covid-related chaos has been a major culprit in this disruption.
“Caution flags are flying,” says Jay Denton, chief analyst for ThinkWhy. “If gains continue at this type of pace, it puts the U.S. economy in serious jeopardy a full recovery by late 2022 or early 2023.”
The rise of the Delta variant has put a kink in the hiring gains that was projected to occur in the fall of 2021.
Of the 22.4 million jobs lost during the pandemic, the U.S. labor market has recouped 17 million, but the recovery has been pretty contingent on geography and economic performance. The LaborIQ software identifies and tracks ten key performance indicators, present in every market, that best rank and measure a local economy’s effectiveness or decline.
Top 5 Best-Performing U.S. Labor Markets
- Dallas-Fort Worth-Arlington, TX
- Phoenix-Mesa-Scottsdale, AZ
- Austin-Round Rock, TX
- Nashville-Davidson-Murfreesboro-Franklin, TN
- Denver, Aurora-Lakewood, CO
Essentially, elevated migration has fueled the geographical changes in the labor force to metro areas that have the job supply for the employee demand. But even with the jobs and rising populations, there is a gap between the talent and the opportunities, ramping up pressure on the need to increase wages. “The tank of talent supply will start to run empty for metros and industries in the first wave of the recovery. Look for some locations in the Southeast, Texas and Midwest to begin searching more frequently for talent outside their metro because as they become magnets for relocation,” states Denton.
A caveat of LaborIQ’s report is the shadow hanging over that is the Delta variant, as it will be a huge factor on what happens next economically and will need to be monitored closely. There is some progress for certain industries that continue to rebuild their workforce, such as professional and business services, whereas leisure and hospitality has taken a little longer to recover, as the pandemic has played a role. Manufacturing and production has been similarly affected. Healthcare is primed to hit another surge with Delta-related hospitalizations expected to climb.
ThinkWhy’s LaborIQ predicts that things will return to pre-pandemic levels at an uneven pace across the major sectors sometime into or after 2025. Will the Phoenix metropolitan area retain its best job markets silver medal? Only time will tell.