What a Location Quotient Is

A location quotient is a ratio of two shares: an industry's share of one metro's jobs, divided by that same industry's share of jobs nationally.

Las Vegas, NV has 25.5% of its jobs in leisure & hospitality, against 11.0% nationally — an LQ of 2.31. The industry is about 2.3 times as prominent there as it is across the country.

Shares are rounded to one decimal for display; the LQ is computed from the unrounded figures, so dividing the two numbers above can land a hundredth away.

• Above 1.0 — above average. The metro has more of that industry than the national mix.
• Around 1.0 — average. The metro looks like the country in that industry.
• Below 1.0 — below average. The industry is a smaller share of this metro's jobs than it is nationally.

The line sits at 1.0, with no buffer. An LQ is a ratio of two shares, so 1.0 is simply the point where a metro matches the national mix.

An LQ describes exposure: which industries a metro has more or less of than the country, and by how much. A high number is not good and a low number is not bad. It is a description of what the local economy is built on.

Read over time, it also shows direction — whether an industry is becoming more or less important to that metro. This is where an LQ is most often misread. It has two moving parts: the industry, and the metro around it. An industry can add jobs for thirty years while its LQ falls, because the rest of the metro grew faster. Another can shed jobs while its LQ rises, because it shrank more slowly than it did nationally. A change in an LQ tells you the balance moved; it does not on its own tell you which side moved.

Size matters alongside the ratio. A high LQ in a small industry and a modest LQ in a large one are very different exposures, which is why every metro page shows the number of jobs behind each figure.

• It counts jobs, nothing else. No wages, productivity or economic output. A high LQ in leisure and hospitality means something different for local incomes than a high LQ in financial activities.
• The categories are broad. Ten supersectors are a starting point, not an answer. A high LQ in Professional & Business Services could be defense contractors, management consulting or legal services. You still need to know the companies and sub-industries underneath.
• Remote work blurs the geography. An LQ is based on where a job is counted, not where the worker lives.
• Definitions move. Changes to metro boundaries and industry classifications introduce noise over long horizons.
• It is not a forecast. An LQ does not tell you which industries will grow, which markets will outperform, or whether today's concentrations will persist.

Everything here is built from the U.S. Bureau of Labor Statistics Current Employment Statistics program — State and Metro Area Employment, Hours, and Earnings. All location quotients, employment levels and growth rates are calculated by Clear Bay Capital from that source.

Employment is reported in thousands and not seasonally adjusted. That makes over-the-year comparisons valid and month-to-month ones misleading, so every comparison here matches the same calendar month — metro against nation, and one year against another.

Industries are grouped into the 10 supersectors that cover all nonfarm employment. MetroLQ publishes 393 metropolitan statistical areas and no metropolitan divisions: a division is a subdivision of an MSA, so publishing both would count the same jobs twice under two names.

The data runs through August 2026 and refreshes monthly as BLS releases it, so figures in the tool move past any number quoted in a write-up. Before a refresh ships, every published figure is independently re-derived from the raw BLS files and reconciled against it.