![For the past couple of years, Cleveland's unemployment rate rose while the state's declined or stayed flat. Economist Joel Elvery says the divergence may have been a measuring error, since the increase in Cleveland's unemployment rate wasn't accompanied by an increase in layoffs or the size of the labor force. [Federal Reserve Bank of Cleveland / U.S. Census Bureau]](https://npr.brightspotcdn.com/dims4/default/40dec63/2147483647/strip/true/crop/1161x616+0+0/resize/840x446!/format/webp/quality/90/?url=http%3A%2F%2Fnpr-brightspot.s3.amazonaws.com%2Flegacy%2Fuploads%2F2018%2F3%2F27%2FFed-jobs-graph.jpg)
The city's economy is slowly improving, even as its population shrinks, according to a new report by the Federal Reserve Bank of Cleveland.
For the past 19 months, Census data showed the year-over-year unemployment rate for the Cleveland metro area ticking up. That was worrying, said Joel Elvery, a policy economist at the Cleveland Fed, because the unemployment rate statewide had been moving in the opposite direction.
"In 2016, you could've looked at the unemployment rate and thought 'Uh oh, Cleveland's having a problem,'" Elvery said. But now, he says the city's economic indicator dials numbers are pointing in a positive direction. Last year, the city's hospitality, construction, and professional service industries saw strong hiring. And at the same time, the cost of living has been pretty stable.
The fastest-growing job sector in the Cleveland metro area between June 2016 and June 2017 was "professional and business services," which grew 3.6 percent. The strength, however, is due in part to a downturn in that sector the year before. [Federal Reserve Bank of Cleveland / U.S. Census Bureau]
"The amount that people earn is pretty typical for the nation as a whole, but our housing values are dramatically lower," said Elvery, "so that makes Cleveland a relatively good value."
The median home value in the region saw its strongest growth in more than a decade during 2017, with home values clocking growth of 5.3 percent year-over-year in December. In that period, the median home value in the Cleveland metro area rose to $137,000, slightly higher than the state average of $130,000, but well below the national average of $206,300.
Despite the encouraging signs, employment growth in the region has been relatively slow (Cleveland's unemployment rate ended last year at 5.4 percent, compared to 4.7 for the state and 4.1 percent for the nation). Additionally, major employment sectors such as education and health care shed about a thousand jobs while employment in retail, transportation and utilities dropped by about 1,800 between June 2016 and June 2017.
"Professional and business services" was the fastest growing sector over that period, adding more than 5,000 jobs. But the strong growth, in part, reflects a delayed recovery from a downturn in employment in this sector in late 2015 and early 2016, Elvery said.
“It will be important to watch if this reversal remains a lasting change in the local labor market in the coming months," he said.
But there's a catch to the good news about jobs: the city's population continues to decline. If Cleveland doesn't turn that around, Elvery said, emplyoment growth will suffer in the long run.
