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Posts by Aaron Nathans, Communications & Public Affairs Manager

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College Destinations Spotlight: San Francisco

The top spot in the biggest category of our 2017 College Destinations Index went to San Francisco, which ranked high in diversity, percentage of college-educated residents, mass transportation, and arts and entertainment options.

To read more, go to our main Daily Economy blog at aier.org/blog.

College Destinations Spotlight: Denver & Boulder

The great state of Colorado played prominently in our 2017 College Destinations Index, as the metro areas of Denver (above) and Boulder won their size categories.

Boulder, home of University of Colorado Boulder, took the top spot in the College Towns category. Boulder’s top ranking in its category was bolstered by high marks in percentage of college-educated residents, ease of non-car transportation into town, arts and entertainment offerings, as well as number of bars and restaurants. That’s in addition to a strong showing among our economic measurements as well…

To read this full blog, go to our main Daily Economy site here.

College Destinations Spotlight: Ann Arbor

Our 2017 rankings of top U.S. college destinations includes Ann Arbor as the best small metro. Our team of researchers gave it this ranking in large part due to its high percentage of college graduates among its residents, and its high level of diversity, affordable homes, and lots of restaurant and entertainment options. (Zingerman’s Deli, of course, is a classic.)

Ann Arbor has a history of ranking high on these sorts of lists…

To read the full blog, go to our main Daily Economy site here.

Ranking America’s Best College Destinations

Photo: University of Colorado Boulder, in Boulder, Colorado.

Today, the American Institute for Economic Research ranked the top U.S. metropolitan areas for college students. The annual AIER ranking is based on nine criteria that measure each area’s cultural, demographic and economic qualities.

In its 2017 College Destinations Index, the cities that ranked highest overall in each city size category were San Francisco; Denver; Ann Arbor, Michigan; and Boulder, Colorado. (See longer list below.)

“The location you choose to go to college determines where you will likely spend the next four years of your life, and possibly where you will start your career. Our ranking reflects the characteristics that make cities attractive to the average college student,” said Amanda Knarr, program coordinator at AIER.

AIER researchers weighed these criteria: youth unemployment; share of college-educated population; pervasiveness of diversity; the labor force participation of young adults; share of STEM workers; rental costs; ease of access to the city without a car; presence of arts and entertainment; and bars and restaurants.

San Francisco and Denver, the top ranking cities in the two large-city categories, offer a favorable economic climate and strong opportunities to prepare for work after college. The highest ranking metro areas for the small cities and towns, Ann Arbor and Boulder, boast a highly educated population, large numbers of STEM workers, as well as strong public transportation systems and plentiful bars and restaurants.

Cities that didn’t rank #1 nevertheless showed their own areas of strength. New York, for instance, led the major metro category for public transportation. Boston led in employing STEM workers. Minneapolis had low young adult unemployment, and Los Angeles was best for entertainment.

Among the top midsize metros, Portland, Oregon boasted by far the best public transportation system, and Pittsburgh and Cleveland had the lowest rents. Austin, Texas had the lowest youth unemployment, and Nashville and Las Vegas led in arts and entertainment offerings.

In addition to Ann Arbor, Norwich, Connecticut also demonstrated a strong record of employing STEM workers among the top small metros. Kalamazoo, Michigan had the lowest rent among this category, and Lincoln, Nebraska had the lowest young adult unemployment.

And among towns, Champaign-Urbana had the best public transportation system; Boulder, and Lafayette, Indiana ranked first and second on the share of STEM employment; Fargo, North Dakota featured the lowest rents; La Crosse, Wisconsin had the lowest youth unemployment; and after Boulder, Bloomington, Illinois topped the arts and entertainment offerings.

If you or your child is deciding on a place to go to college, our rankings may prove useful.  Although our findings are more general, we recognize that individual preferences play a strong role in the decision making process. The “College Destinations Tool” on our website lets you choose factors that you value the most to customize your own ranking. The tool, as well as detailed overall rankings, are available at www.aier.org/cdi.

The top college destinations in each category are, in descending order:

Major metros (over 2.5 million residents):

1. San Francisco

2. Boston

3. Washington, D.C.

4. Minneapolis

5. Seattle

6. New York

7. Los Angeles

8. Chicago

9. Dallas

10. Houston

11. San Diego

12. Baltimore

13. Atlanta

14. St. Louis

15. Miami

 

Midsize metros (1 million – 2.5 million):

1. Denver, Colorado

2. Austin, Texas

3. Portland, Oregon

4. San José, California

5. Raleigh, North Carolina

6. New Orleans, Louisiana

7. Nashville, Tennessee

8. Columbus, Ohio

9. Milwaukee, Wisconsin

10. Virginia Beach, Virginia

11. Las Vegas, Nevada

12. Kansas City, Missouri

13. Pittsburgh, Pennsylvania

14. Tucson, Arizona

15. Richmond, Virginia

16. Charlotte, North Carolina

17. Cleveland, Ohio

18. Rochester, New York

19. Hartford, Connecticut

20. Buffalo, New York

 

Small metros (250,000-1 million):

1. Ann Arbor, Michigan

2. Tallahassee, Florida

3. Durham-Chapel Hill, North Carolina

4. Madison, Wisconsin

5. Gainesville, Florida

6. Fort Collins, Colorado

7. Honolulu, Hawaii

8. Santa Barbara, California

9. Bremerton, Washington

10. Santa Cruz, California

11. Lubbock, Texas

12. Norwich, Connecticut

13. Lexington, Kentucky

14. Lincoln, Nebraska

15. Eugene, Oregon

16. Albuquerque, New Mexico

17. Lansing, Michigan

18. Amarillo, Texas

19. Portland, Maine

20. Kalamazoo, Michigan

 

College towns (Below 250,000):

1. Boulder, Colorado

2. Champaign-Urbana, Illinois

3. Flagstaff, Arizona

4. Ithaca, New York

5. Iowa City, Iowa

6. Bloomington, Indiana

7. College Station, Texas

8. Manhattan, Kansas

9. Columbia, Missouri

10. Bloomington, Illinois

11. Charlottesville, Virginia

12. Lafayette, Indiana

13. Fargo, North Dakota

14. Athens, Georgia

15. State College, Pennsylvania

16. Rochester, Minnesota

17. Blacksburg, Virginia

18. Jacksonville, North Carolina

19. La Crosse, Wisconsin

20. Bellingham, Washington

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A More Affordable Holiday Season

christmas-take-3In the new edition of AIER’s Everyday Price Index, we discuss the prices for common holiday gifts like apparel, books, and personal-care products, which are all lower.

The EPI starts with the Consumer Price Index, which tracks inflation. It then strips out the fixed expenses faced by consumers, such as home mortgages. The EPI fell 0.4 percent in November, led by lower gasoline prices. The CPI, meanwhile, fell just 0.2 percent for the month on a non-seasonally-adjusted basis. The EPI is not adjusted either.

Read more about the new edition of the EPI here.

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The Receding Risk of Recession

Economic conditions have improved, as our economic index rose to 67 in November, up from 58 in October, according to the new edition of Business Conditions Monthly, out today.

This is the third month in a row that the index is above the neutral 50 level. We do not believe there is enough evidence to suggest that the economy is on anything but a slow growth path. However, a reading of 67, the highest since September, provides solid evidence that the risk of recession in the months ahead has diminished.

The improvement was due to two of the 12 indicators improving from negative to neutral. They were consumer sentiment, as measured by the University of Michigan Index of Consumer Expectations, and real new orders for core capital goods.

It is unclear whether the improvement in consumer expectations has anything to do with the presidential election’s outcome, or simply the end of the campaign. Regardless, consumers remain the engine of growth, supported by a strong jobs market and rising consumer sentiment.

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AIER’s Bob Hughes Quoted in Wall Street Journal

The Wall Street Journal’s Ben Leubsdorf included AIER Senior Research Fellow Bob Hughes in his roundup of economists and analysts reacting to Friday’s jobs report. The report, from the Labor Department, showed the headline unemployment rate had fallen to 4.6 percent, the lowest rate since 2007. The department a seasonally adjusted 178,000 new jobs in November.

In the story, Hughes notes that wage growth faltered, even as the economic expansion continued to grind ahead. The roundup also included comments from representatives of Barclays, PNC Financial Services Group, Glassdoor and the Economic Policy Institute. See the article here, and for Hughes’ full remarks on the jobs report, click here.

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Late Autumn at AIER’s Campus in the Berkshires

I snapped these pictures of our scenic campus in the Berkshires just before our offices opened this morning.

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The Shifting Link Between Economic Growth and Jobs

A long-accepted law of economics is undergoing changes, as the unemployment rate has become more responsive to changes in economic output, according to a new research brief released by the American Institute for Economic Research.

It has long been accepted that as the economy grows, the unemployment rate goes down, and vice versa. This is known as “Okun’s Law,” named for Arthur Okun, an American economist.

But it has not been a 1-to-1 relationship. Okun said in 1962 that for the unemployment rate to fall by 1 percentage point — say, from 6 percent to 5 percent — the economy had to grow by about 3 percent.  Conversely, when economic output falls, the unemployment rate would grow at a considerably slower rate. And that largely held true prior to 2005.

But in a new AIER research brief, senior research fellow Polina Vlasenko writes that since 2005, hiring and layoffs have become more responsive to smaller changes in GDP.

After 2005, GDP needed to grow 1.4 percent above the long-term trend to reduce the unemployment rate by 1 percent. And unemployment grew 0.7 percentage points when GDP fell by 1 percent.

“The increased sensitivity of the unemployment rate to GDP means that after 2005, the unemployment rate could be expected to rise much more in recessions than it used to. It also means that when the unemployment rate falls during recoveries, economic growth will be subdued, as we have seen in the past few years,” Vlasenko writes.

Before 2005, when faced with a drop in demand, companies used to reduce employment by about half the size of the drop. But after 2005, it appears companies have reduced employment by 95 percent of the reduction in demand.

“This new behavior of companies implies that it is no longer difficult or time-consuming for them to find suitable employees,” Vlasenko wrote. “The difficulty of finding new employees once prevented companies from laying off people as soon as they saw any slowdown in demand. But since they now appear to lay off people much more readily in an economic slowdown, employers must believe that recruiting new people will not be a problem once the economy starts growing again.”

The full research brief, which is free to read, can be found here.

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