After four years of a fragile and uneven recovery, the U.S. job machine is likely to kick into high gear in 2014. Even recession-battered states such as Arizona and Florida are expected to generate jobs at a healthier clip.
Overall, the U.S. economy is projected to generate 2.6 million jobs in 2014 year, up from 2.2 million last year, largely on the strength of the country's booming health care, energy and high-tech sectors.
Nearly 572,000 of the new jobs will be added in just two states, Texas and California, according to Moody's Analytics, a global economic forecasting company. Florida will add 176,000 jobs, while Arizona is expected to add 77,000, Moody's estimates.
"No question about it, the economy and creating jobs will be priority number one for states across the country in 2014," said Sujit M. CanagaRetna, senior fiscal analyst at the Council of State Governments.
CanagaRetna said economic growth, particularly job creation, has been less robust than in other post-recessionary periods. "There is enormous pressure on state policymakers – further complicated by the fact that 2014 is an election year – to create a suitable environment for sustained, solid job growth," he said.
As an example, in more than a dozen states, elected officials from both parties scrambled with incentives to attract the production facility for Boeing's new 777X jet, which is expected to employ as many as 8,000 workers. The competition ended when workers at Boeing recently approved the labor contract, ensuring Boeing will keep those jobs in Washington.
Even as the U.S. economy gathers steam, state lawmakers may be under increasing pressure to do more to help the nearly 11 million Americans who are still unemployed. Republicans likely will continue to press for tax cuts as a way to create jobs, while Democrats will try to boost job training and education programs and push for increases in the minimum wage.
Outlook best in West, South
As 2013 ended, the country had regained about 85 percent of the 9 million jobs lost during the recession, creating around 200,000 new jobs a month. The national unemployment rate stood at its lowest rate in five years, at 7 percent, down from a 10 percent peak in October 2009.
From its highest to lowest point, the U.S. economy lost 8.74 million jobs during the recession. Since employment bottomed out in early 2010, jobs have risen by 7.45 million. Moody's expects employment to return to its previous peak in mid-2014.
The job outlook is particularly rosy for states in the West: Arizona, Colorado, Oregon, Idaho and Utah are five of the 10 states Moody's expects to have the highest growth rates. Steady home construction, robust investment in high tech and the aerospace industry, and trade with Asia are the reasons why.
Employment prospects vary from state to state, but nationwide, less than one percentage point separates the jobless rates across the country's four main regions, a pattern not seen since 2008 at the onset of the Great Recession, said Steven G. Cochrane, managing director of Moody's Analytics.
Likewise, the latest survey from Manpower Employment, a temp agency, shows the strongest outlook for hiring since 2008. The job front for early 2014 looks most promising in the Florida cities of Deltona and Cape Coral and the Texas cities of McAllen, Austin and Dallas, Manpower said. Employers in Buffalo, Memphis, Hartford and Chicago are not as optimistic.
What kind of jobs, and where?
Nationwide, among the fastest growing jobs are those in health care and construction (see slide show). The hot jobs in Florida include cement masons, construction project managers and carpenters. In Colorado,registered nurses and retail store workers are in demand.
Longer term through 2020, New York expects to need biomedical engineers and event planners. Home health aides and/or personal care aides are the top growing jobs in California, Ohio and Utah. Registered nurses and physical therapists will be needed in Idaho and South Carolina through 2020, according to state estimates.
Thanks to its ongoing energy boom, North Dakota is still creating jobs faster than any other state, with an increase again this year of 3.6 percent, about the same as last year, ahead of Arizona's 3 percent growth rate, according to Moody's estimates.
In raw numbers, the nation's largest states are expected to add the most jobs in 2014. Texas, which replaced all of its recession-hit jobs by December 2011, is expected to add 308,000 new jobs in 2014. California has not yet recovered the 1.4 million jobs lost during the recession, but will edge closer as it adds nearly 264,000 new jobs this year.
But job growth is likely to be lackluster in other areas, notably the nation's capital and Alaska. The District of Columbia's heavy reliance on the shrinking federal government will result in paltry job growth. Alaska is losing energy jobs to fracking in North Dakota and Texas, both of which have surpassed Alaska in terms of oil production.
Elsewhere, Alabama and West Virginia are expected to be below the national average in job growth in 2014, but are trending in the right direction. Alabama has seen improvements in manufacturing, on the strength of its expanding auto plants there, including Mercedes-Benz, Honda and Toyota, while the opening of the Appalachia-to-Texas pipelineis bolstering West Virginia's job outlook.
Uptick in growth nationally
Another indicator of the steadily growing strength of the U.S. job market came from the Federal Reserve's decision in late December to reduce its stimulus for the U.S. economy.
Some economists are forecasting job growth to gradually accelerate to 3 percent in 2014, up from the 2 percent average annual pace of the last four years.
Others are more cautious. The National Association for Business Economics and Standard & Poor's both are forecasting payrolls to increase in the range of 195,000 to 200,000 jobs per month in 2014, and they predict an overall unemployment rate of about 7 percent, not much different than today. Stephen P. A. Brown, director of theCenter for Business and Economic Research at the University of Nevada, Las Vegas, figures U.S. employment won't reach its pre-recession peak until 2015.
The U.S. economy might have gotten a boost from the two-year budget deal Congress approved in December that eases some of the across-the-board spending cuts known as sequestration. Equally important, the budget agreement might give businesses more confidence to hire and invest since it guarantees there won't be another government budget crisis before the deal expires in 2015.
A worsening global economy, however, still poses risk to states that rely heavily on exports. If the recovery among European Union countries falters, states in the Northeast would lose momentum while a shock to the Chinese economy could put the brakes on Western states, Cochrane said.
States rebound after housing hitMark Zandi, chief economist of Moody's Analytics, expects 2014 to be a "breakout year." He predicts that within three years the U.S. economy will reach full employment — estimated as a 5.75 percent jobless rate and 64 percent labor force participation.
The housing bust decimated the economies of Arizona, California, Florida and Nevada. Now all four states are seeing steady growth—but for different reasons.
Arizona is getting a boost from the high-tech industry. Apple announced it will open a new plant in Mesa and hire 2,000 workers to build and operate the facility. Intel is completing work on a $5 billion semiconductor plant expansion in Chandler, which will add 1,000 jobs. And the Internet domain company, GoDaddy, has broken ground on a new 150,000-square-foot technology center in Tempe that initially will employ 300 people.
"While growth is slow compared to past recoveries, we are making good progress compared to other states," said research professor Lee McPheters at Arizona State University's W. P. Carey School of Business.
McPheters said Arizona jumped from being the 49th ranked state for job growth in 2010 to the seventh ranked state in October 2013, based on his analysis of data from the Bureau of Labor Statistics. Moody's puts Arizona at No. 2 for 2014. Despite that high ranking, McPheters said Arizona is still two to three years from a full economic recovery. He figures the state has regained 46 percent of the jobs it lost in the recession, but it still has 170,000 more jobs to go.
Only 15 states and the District of Columbia have recovered all the jobs they lost during the recession, according to the latest report from the Joint Economic Committee, which was created by Congress to review economic policy. The 15 are Colorado, Iowa, Louisiana, Massachusetts, Maryland, Minnesota, Montana, Nebraska, New York, Oklahoma, South Dakota, Texas, Utah, Vermont and West Virginia.
Construction boom in Florida
In Florida, a surge in construction and increased tourism are behind the state's strong job outlook for 2014. Florida is expected to add more than 176,000 jobs next year, which will go a long way toward helping Republican Gov. Rick Scott live up to his 2010 election-year promise to create 700,000 jobs in seven years.
Sean Snaith, director of the University of Central Florida's Institute for Economic Competitiveness, predicts Florida will have added 600,000 jobs through 2014, when Scott is running for re-election. Snaith figures the state will hit the 700,000 mark by the middle of 2015.
Some of the jobs stem from companies relocating their headquarters to Florida, including Hertz, where some 700 employees are expected to be relocated by 2015 from New Jersey and Tulsa, Okla. The recently merged companies, Office Depot and OfficeMax, also will set up a new global headquarters in Boca Raton, a move that Scott has called "a game-changer" for Florida.
Silicon Valley boosts California
California, the world's ninth-largest economy, missed making Moody's list of the top 10 states for job growth, but at 15th it is expected to do relatively well. A recovering housing market and the high-tech industry in Silicon Valley are largely responsible for California's bright outlook.
California added jobs at a rate faster than the national average in 2013, including posting more new construction jobs than any other state in 2013, with more than 31,500 new jobs.
The new jobs are largely along the coast, particularly Silicon Valley, which created payroll employment at twice the U.S. rate in 2013, according to the latest forecast from the UCLA Anderson Forecast.
Jobs are more plentiful in the Bay Area, Orange County, San Diego and Ventura compared to the rest of the country, while the Sacramento Delta, the San Joaquin Valley and the Inland Empire are doing less well.
Nevada's job outlook has improved considerably from its worst unemployment of 14 percent, but it still has a long way to go to replace all of its recession-related losses. Moody's expects the state to create 20,000 jobs in 2014, about the same as last year.Among the few bright spots inland in California are Kern County's booming renewable energy sector; the newmedical school at the University of California, Riverside that opened in 2013; and Amazon plans to open a 1.2 million-square-foot logistics center in Moreno Valley.
The state still depends largely on gambling and tourism in Las Vegas, which has already exceeded numbers of visitors seen before the recession. The state expects these sectors will help create nearly 8,000 new jobs in retail and hospitality in 2014.
The recession wiped out 200,000 jobs in Nevada, half of them in construction. The state is slowly gaining some back. Several new projects are sparking a comeback in that sector:
Caesars Entertainment's $550 million, 300,000-square feet "LINQ," an entertainment district anchored by the world's tallest observation wheel. The project has employed about 3,000 construction workers and will create approximately 1,500 permanent jobs.Malaysia-based Genting Group is expected to begin construction sometime in 2014 on its $2 billion 87-acre Resorts World Las Vegas that the company promises will bring "tens of thousands of jobs to Southern Nevada for many years to come."
Nevertheless, Nevada expects employment to remain below the peak levels of 2007 for several more years, according to Bill Anderson, the state's chief economist.
Stateline is a nonpartisan, nonprofit news service of the Pew Charitable Trusts that provides daily reporting and analysis on trends in state policy.