Americans are more confident in the economy than they were last year, a recent Gallup poll reveals. And optimism about the national economy, it appears, is largely driven by prosperity at the local level.
Gallup released the results of its economic confidence poll this week, measuring responses from residents in the 50 largest metropolitan areas in the country. Those surveyed were asked to rate the current state of the economy, as well as whether they believed the economy was going to get better or worse. While still generally negative, residents in some areas believe the economy is headed in the right direction. Reviewing Gallup’s results, 24/7 Wall St. took a closer look at the 10 large metropolitan areas where residents felt most optimistic about the economy.
Favorable labor conditions are one factor that has a positive impact on how residents perceive the economy. Residents in these cities all report job growth, and nearly all have lower-than-average unemployment. Based on another 2012 Gallup survey also released this week, seven of the top 10 cities had among the highest rates of workers indicating that their employer was hiring.
Similarly, eight of these cities had a lower unemployment rate than the national average rate earlier this year. What’s more, nearly all of these cities have had unemployment decline at a faster rate, relative to the nation’s other metropolitan areas.
These places also have professional, highly educated workforces. As a result, the economies are resilient and better able to take advantage of new opportunities quickly. These cities have among the highest proportions of adults with bachelor’s degrees and people employed in professional, scientific and management occupations in the country. They also have among the lowest proportions of workers employed in service and manufacturing jobs.
Examples of the cities’ resilience includes a relatively quick housing recovery. In eight of the 10 cities most optimistic about their economies, home prices grew at among the fastest rates in the country between the first half of 2011 and the first half of 2012.
In an interview with 24/7 Wall St., Gallup Chief Economist Dennis Jacobe explained that most of the cities with the best economic outlook have been able to avoid the worst of the recession because they are benefiting from a strong energy sector, a strong information and technology sector, or, like Austin, a combination of these. “The Washington D.C. area continues to be optimistic and do well, which we attribute to government, and to some degree the recession-proof nature of government,” Jacobe added.
Based on Gallup’s 2012 Economic Confidence survey of the 50 largest MSAs in the country, 24/7 Wall st. reviewed the 10 metro areas with the highest economic confidence — measured by Gallup as rating the economy as “excellent” or “good” rather than “poor,” and believing the economy was going to get “better” rather than “worse.” We also reviewed the Gallup 2012 Job Creation Index, which asked workers whether their companies were hiring or firing workers. In addition to data from Gallup, 24/7 Wall St. reviewed unemployment rates and employment figures from the Bureau of Labor Statistics; home price forecasts from Fiserv as of the second quarter of 2012; and industry composition, poverty and income data from the U.S. Census Bureau. All Gallup data, unless otherwise noted, are for the 50 largest metropolitan areas.