The Bureau of Labor Statistics released the finalized 2012 annual average unemployment data for metropolitan statistical areas (MSAs), cities and counties on Friday April 19, 2013. These data commonly serve as the basis for high unemployment area calculations to determine qualifying targeted employment areas under the EB-5 program throughout the year.
Here are some headlines from the new unemployment data release.
National Unemployment Rate During 2012: 8.1%
Qualifying High Unemployment Area (HUA) Rate: 12.2% (150% of national average, rounded to 1 decimal place)
Number of TEA States: 0
Number of TEA MSAs: 17 (out of approx 372)
Number of TEA Counties: 189 (out of approx 3,141)
Number of TEA Cities: 163 (out of approx 1,777)
Comparison of 2012 to 2011
In 2011, the state of Nevada qualified as a high unemployment area however in 2012, no state qualifies as a high unemployment area.
The total number of high unemployment qualifying MSAs decreased by one, with three improving metro areas no longer qualifying and two worsening metro areas newly qualifying for targeted employment area status.
MSAs Losing TEA Status:
- Las Vegas-Paradise, NV Metro Area
- Palm Coast, FL Metro Area
- Riverside-San Bernardino-Ontario, CA Metro Area
MSAs Gaining TEA Status:
- Atlantic City-Hammonton, NJ Metro Area
- Ocean City, NJ Metro Area
More than one-half of the qualifying high unemployment cities are located in California, 83 out of the 163 qualifying cities. New Jersey has 22 cities that qualify as high unemployment areas.
The total number of high unemployment qualifying counties increased by seven overall from 182 to 189 counties, with 34 improving counties no longer qualifying and 41 worsening counties newly qualifying for targeted employment area status.
We’ve compiled a list of all qualifying MSAs, counties and cities according to the BLS 2012 average annual data that can be downloaded here:
County Unemployment Change Relative to the National Unemployment
The county unemployment data are particularly interesting as the numbers drive the census tract unemployment calculation. The relationship between the local and national unemployment rate is at the root of the TEA determination. The national unemployment rate decreased fell from 8.9% to 8.1% (a reduction of approximately 9%), therefore, if an individual county unemployment rate (1) increased or (2) decreased by less than 9%, then the county’s comparison to the national has worsened. This does not indicate that the county whose unemployment rate worsened relative to the national average immediately qualifies as a TEA. It simply means that it has either (1) moved closer to becoming a TEA, (2) crossed over and is now a TEA or (3) remained solidly classified as TEA.
The unemployment rate in 1,316 counties (42% of the 3,141 counties) worsened relative to the national average. Among this group, 91% moved closer to becoming a TEA, 3% crossed over and gained TEA status and 6% retained TEA status from the previous year.
The county unemployment rate improved relative to the national average in 1,825 counties (58%). Among this group, 2% or 34 counties lost TEA status.
The unemployment status changes were generally dispersed throughout the country although Georgia saw 10 counties gained TEA status, the most among all states. Also, many states in the northeast affected by Hurricane Sandy saw 100% of their counties worsen relative to the national unemployment rate. These states include Connecticut, Delaware, Maine, New Hampshire, New Jersey, New York and Pennsylvania.
Please see our map to investigate specific census tracts and how learn how a site may qualify on a tract basis.
Questions about TEA’s, state certifications or EB-5 economic analysis? Give us a call or send us an email.