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Methodology For 2014 Best Cities For Jobs List

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By Michael Shires

To compile our list, we sought to measure the robustness of American metro areas’ growth both recently and over time. We looked at all of the metropolitan statistical areas (MSAs) for which the Bureau of Labor Statistics reports monthly employment data. They are derived from three-month rolling averages of U.S. Bureau of Labor Statistics “state and area” unadjusted employment data reported from November 2002 to January 2014.

The data reflect the North American Industry Classification System categories, including total nonfarm employment, manufacturing, financial services, business and professional services, educational and health services, information, retail and wholesale trade, transportation and utilities, leisure and hospitality, and government.

This year’s rankings use five measures of growth to rank all 398 metro areas for which full data sets were available from the past 10 years. “Large” areas include those with a current nonfarm employment base of at least 450,000 jobs. “Midsize” areas range from 150,000 to 450,000 jobs. “Small” areas have as many as 150,000 jobs. This year’s rankings reflect the current size of each MSA’s employment. Only one MSA changed size categories: Modesto, Calif., which moved up from small to midsize. In the instances where the analysis refers to changes in ranking order within the size categories, this MSA's changes are reported as if it had been included in its current category in the prior year.

The index is calculated from a normalized, weighted summary of: 1) recent growth: the current and prior year’s employment growth rates, with the current year emphasized (two points); 2) mid-term growth: the average annual 2008-2013 growth rate (two points); 3) long-term trend and momentum: the sum of the 2008-2013 and 2002-2007 employment growth rates multiplied by the ratio of the 2002-2007 growth rate over the 2008-2013 growth rate (one point); 4) current year growth (one point); and 5) the average of each year’s growth rate, normalized annually, for the last 10 years (two points).

This methodology varies slightly from 2013 in that long-term momentum (factor 3) is reduced slightly in importance and long-term consistency (factor 5) has been added to mitigate the distortions created by instances of huge swings in some MSAs associated with the Great Recession. The goal of the rankings methodology is to capture a snapshot of the present and prospective employment outlook in each MSA; these revisions allow the reader to have a better sense of the employment climate in each.