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Unemployment Rate Falls, Payrolls Increase in Most Metro Areas

metropolitan unemployment rate [1]The unemployment rate dropped year-over-year in 341 out of 372 metropolitan areas in December while payrolls increased in 312 metros, according to data released by the U.S. Bureau of Labor Statistics [2] on Wednesday.

The BLS' December 2014 Metropolitan Area Empl0yment and Unemployment Report [3] found that 208 metro areas out of 372, about 56 percent, had an unemployment rate December's adjusted national average of 5.4 percent. BLS reported that 158 metros had an unemployment rate below 5.0 percent. The lowest unemployment rate for the month among metros was in Midland, Texas, at 2.1 percent. Of the 49 metros that had a population of at least one million in the 2000 census, the highest unemployment rate in December was in Memphis, Tennessee, at 7.6 percent.

Continued labor market improvements may bode well for the housing market for the coming year, since housing relies on steady nationwide employment to flourish, according to some economists' predictions [4]. The national unemployment rate continues to drop – December's rate of 5.4 percent represents a decline of 1.1 percentage points from the same month a year earlier.

The largest year-over-year decline in unemployment rate for December occurred in Decatur, Illinois, where the rate fell from 12.4 percent to 7.5 percent (4.9 percentage points) in the 12-month period. Decatur was followed closely by Danville, Illinois, its neighbor about 80 miles to the northeast, where the rate dropped from 12.4 percent to 7.6 percent – a drop of 4.8 percentage points.

Payrolls increased year-over-year in 312 metros in December, according to BLS, while 49 areas saw declines and they remained the same in 11 metros. Two of the three largest increases occurred in Texas – first was Dallas-Fort Worth-Arlington at 136,000, followed by New Jersey-Long Island, New York-New Jersey-Pennsylvania at 129,000 and Houston-Sugar Land-Baytown at 120,600.

The unemployment rate remained high in some places in December, according to the report – 155 metros reported a rate above the national average of 5.4 percent, and the rate was at least 10.0 percent in 14 metros. Yuma, Arizona, had the highest unemployment rate for the month with 22.1 percent, and El Centro, California, followed closely with 21.0 percent. Unemployment increased year-over-year in 25 metros, and it remained unchanged in six. The largest increase occurred in Alexandria, Louisiana, at 1.9 percentage points (from 4.8 percent up to 6.7 percent).