The country lost 2.2 million private-sector jobs between June 2001 and the same month a year later. Even the most prosperous markets paid the price: Dallas-Fort Worth watched 94,400 jobs slip away during that 12-month period, while Houston lost 20,700 jobs, Phoenix 13,400 and Las Vegas 4,500.
A weary nation hoped for a swift recovery, but economists warned that it might be slow and difficult.
They were in for a pleasant surprise. More than 6 million jobs have been created since June 2004, pushing the number of private-sector positions to 116.9 million by the midpoint of 2007. That's 6.4 percent above the trough of 109.9 million in June 2002.
Nowhere has the recovery been stronger than Phoenix, which is currently the nation's hottest employment market, according to a new Bizjournals study.
"Phoenix has seen a real boom, and it has been broad-based," says Austin Litvak, an associate economist with Moody's Economy.com, an international research firm. "The economy there really took off in 2004 and ‘05, largely due to the housing market and the large number of people moving into the area."
Phoenix has expanded its employment base by 23.4 percent since 2002, almost quadrupling the national rate. Its five-year influx of 325,100 private-sector jobs topped the nation, with Washington's gain of 245,400 a distant second.
That torrid pace has slowed a bit lately. Phoenix added an average of 68,000 private-sector jobs annually between 2002 and 2006, but dropped to 52,900 in 2006-07. The latter figure was fourth-best in the country, trailing Dallas, Houston and New York City.
"That being said, the growth is still above the national average, still impressive," says Litvak. "The housing market is going through a correction now, but when it stabilizes, we believe Phoenix will begin accelerating again."
Bizjournals used a nine-part formula to analyze employment trends in the nation's 100 largest labor markets. The formula was fueled by midyear data complied since 2002 by the U.S. Bureau of Labor Statistics.
The 100 markets, taken collectively, contained roughly two-thirds of the nation's 116.9 million private-sector jobs as of June 2007. (Click here for the study's methodology, and click here for the top-to-bottom standings of all 100 markets.)
There's a strong Western flavor to the resulting list of America's hottest employment markets:
-- Right behind Phoenix is No. 2 Salt Lake City, where the number of private-sector jobs has soared 11.3 percent since 2005, the nation's fastest growth rate during the past two years.
-- Boise, Idaho, occupies third place. It has the lowest unemployment rate among the 100 markets in the study, 2.1 percent. (Click here for the national leaders in several categories, including unemployment rate.)
-- Riverside-San Bernardino, Calif., is fourth. The area commonly known as the Inland Empire has added 233,200 jobs since 2002, outperforming all markets but Phoenix and Washington in that category.
Rounding out the top 10 are Houston, Dallas-Fort Worth, Las Vegas, Austin, Cape Coral-Fort Myers, Fla., and Tucson. (Click here for profiles of the 10 hottest labor markets.)
Texas, with three metros in the top 10, boasts more hot markets than any other state. Different sectors are given credit for the employment upswings in each area -- energy in Houston, finance in Dallas-Fort Worth and technology in Austin.
"All three are benefiting from the overall growth in Texas, to be sure. But they all have their own unique aspects that help them to define their own paths," says M. Ray Perryman, president of the Perryman Group, an economic-analysis firm in Waco, Texas.
Las Vegas was prominent in Bizjournals' previous rankings of hot labor markets -- No. 1 in 2005 and No. 2 in 2006. But a recent slowdown has pushed it to seventh place this time.
Vegas has added an impressive total of 191,000 private-sector jobs since 2002, but only 13,100 arrived during the 2006-07 span. The latter count was 39,800 below Phoenix's one-year increase.
"The difference is that Las Vegas is a one-trick pony," says Elliott Pollack, president of Elliott D. Pollack & Co., an economic-consulting firm in Scottsdale, Ariz. "Las Vegas is driven by the gaming industry. If gaming cools off, the whole area cools off. Phoenix has a much more diversified economy."
At the bottom of Bizjournals' rankings is Detroit, the coldest job market in America.
Domestic automakers have struggled under the weight of inventory backlogs, high gas prices and foreign competition. Detroit, which remains heavily dependent on the auto industry, has lost 104,000 private-sector jobs since 2002.
The runners-up on the list of coldest markets are New Orleans, which was devastated by Hurricanes Katrina and Rita in 2005, and Youngstown, Ohio, which is saddled with an aging manufacturing sector.
The remaining places in the bottom 10 are Dayton; Cleveland; Lansing, Mich.; Toledo, Ohio; Springfield, Mass.; New Haven, Conn.; and Grand Rapids. (Click here for profiles of the 10 coldest labor markets.)
By G. Scott Thomas (Bizjournals) -- It's easy to forget that America was still reeling from an economic double whammy -- the dot-com bust and the 9/11 terrorist attacks -- just a half-decade ago.
