Americans are more confident in the economy than they were last year, a recent Gallup poll reveals. And optimism about the national economy, it appears, is largely driven by prosperity at the local level.

Gallup released the results of its economic confidence poll this week, measuring responses from residents in the 50 largest metropolitan areas in the country. Those surveyed were asked to rate the current state of the economy, as well as whether they believed the economy was going to get better or worse. While still generally negative, residents in some areas believe the economy is headed in the right direction. Reviewing Gallup’s results, 24/7 Wall St. took a closer look at the 10 large metropolitan areas where residents felt most optimistic about the economy.

Click here to see the cities optimistic about the economy

Favorable labor conditions are one factor that has a positive impact on how residents perceive the economy. Residents in these cities all report job growth, and nearly all have lower-than-average unemployment. Based on another 2012 Gallup survey also released this week, seven of the top 10 cities had among the highest rates of workers indicating that their employer was hiring.

Similarly, eight of these cities had a lower unemployment rate than the national average rate earlier this year. What’s more, nearly all of these cities have had unemployment decline at a faster rate, relative to the nation’s other metropolitan areas.

These places also have professional, highly educated workforces. As a result, the economies are resilient and better able to take advantage of new opportunities quickly. These cities have among the highest proportions of adults with bachelor’s degrees and people employed in professional, scientific and management occupations in the country. They also have among the lowest proportions of workers employed in service and manufacturing jobs.

Examples of the cities’ resilience includes a relatively quick housing recovery. In eight of the 10 cities most optimistic about their economies, home prices grew at among the fastest rates in the country between the first half of 2011 and the first half of 2012.

In an interview with 24/7 Wall St., Gallup Chief Economist Dennis Jacobe explained that most of the cities with the best economic outlook have been able to avoid the worst of the recession because they are benefiting from a strong energy sector, a strong information and technology sector, or, like Austin, a combination of these. “The Washington D.C. area continues to be optimistic and do well, which we attribute to government, and to some degree the recession-proof nature of government,” Jacobe added.

Based on Gallup’s 2012 Economic Confidence survey of the 50 largest MSAs in the country, 24/7 Wall st. reviewed the 10 metro areas with the highest economic confidence — measured by Gallup as rating the economy as “excellent” or “good” rather than “poor,” and believing the economy was going to get “better” rather than “worse.” We also reviewed the Gallup 2012 Job Creation Index, which asked workers whether their companies were hiring or firing workers. In addition to data from Gallup, 24/7 Wall St. reviewed unemployment rates and employment figures from the Bureau of Labor Statistics; home price forecasts from Fiserv as of the second quarter of 2012; and industry composition, poverty and income data from the U.S. Census Bureau. All Gallup data, unless otherwise noted, are for the 50 largest metropolitan areas.

10. Houston-Sugar Land-Baytown, Texas
>Pct. say economy improving: 44.5%
>Pct. say economy getting worse: 51.0%
>Pct. say employers hiring: 45.0%
>Unemployment: 6.2%

With 45% of respondents noting their employers were hiring and just 11.8% saying their employers were letting people go, Houston ranked as the best city in the nation for job creation, according to Gallup. Also, 18.3% of Houston area residents surveyed rated the economy as excellent, the sixth-highest percentage in the nation. Houston led the nation in corporate facility projects in 2012, according to Site Selection, a corporate real estate site. Between the second quarter of 2007 and the second quarter of 2012, home prices grew 12.2%, while home prices nationwide fell by 27.6%.

9. Salt Lake City, Utah
>Pct. say economy improving: 44.1%
>Pct. say economy getting worse: 51.0%
>Pct. say employers hiring: 39.8%
>Unemployment: 5.2%

According to Gallup’s 2012 Job Creation Index, job creation in Salt Lake City ranked better than all but four metropolitan areas across the country. Nearly 40% of respondents indicated that their employer was expanding headcount, while just over 12% indicated that their company was downsizing. Not everyone in the city thought that things were going well, however. Nearly 47% of respondents thought that the economy was just fair, while more than 34% believed the economy was in poor shape. In addition, 51% of those surveyed believed that the economy was getting worse, while only 44% indicated it was getting better. Still, this is a better economic outlook than 41 of the 50 largest metro areas.

Also Read: The Seven States Running Out of Water

8. Columbus, Ohio
>Pct. say economy improving: 45.1%
>Pct. say economy getting worse: 49.9%
>Pct. say employers hiring: 42.9%
>Unemployment: 6.1%

Columbus had the third-highest percentage of workers, behind only Houston and the Orlando metro area, who said their employers were hiring. Among the industries adding the most jobs in Columbus has been education and health services, in which employment rose by an impressive 5.2% between January of 2012 and 2013. This trend may continue, as Ohio State University, located in Columbus, plans to ramp up hiring in 2014, with an end goal of growing its faculty by between 8% and 10% over the next decade.

7. Denver-Aurora, Colo.
>Pct. say economy improving: 45.2%
>Pct. say economy getting worse: 50.8%
>Pct. say employers hiring: 37.4%
>Unemployment: 7.3%

When asked about the state of the economy, 18.3% of Denver area residents rated it as good or excellent, lower than only five other cities. However, nearly 47% rated the economy as just fair, while more than 34% rated it as poor. Job creation in the metro area, while far from the best, fared better than the majority of the metropolitan areas surveyed. More than 37% of respondents said their employers were hiring, compared to just over 14% who indicated that their employer was firing workers.

6. Austin-Round Rock, Texas
>Pct. say economy improving: 45.2%
>Pct. say economy getting worse: 49.1%
>Pct. say employers hiring: 40.0%
>Unemployment: 5.3%

Austin was one of just five major cities where less than one-third of respondents described national economic conditions as poor. Among the reasons for Austin’s relative lack of pessimism is that Austin ranked as one of the best cities in the nation for job creation, with 40% of all respondents stating their employers were hiring in 2012. Last year, 72.3% of residents told Gallup that the area was improving, the second-highest percentage out of the 50 largest metro areas. Austin’s unemployment rate as of January was just 5.3%, much lower than the nationwide rate of just under 8%.

5. Minneapolis-St. Paul-Bloomington, Minn.-Wis.
>Pct. say economy improving: 49.9%
>Pct. say economy getting worse: 45.3%
>Pct. say employers hiring: 37.1%
>Unemployment: 5.5%

Close to 20% of Minneapolis-St. Paul-Bloomington area residents indicated that the economy was good or excellent, higher than any other metropolitan area except for Washington D.C. Furthermore, just under 50% of residents indicated that the economy was improving, higher than all but four other cities. In January, the unemployment rate in the metropolitan area was only 5.5%, compared to 7.9% across the country. The median household income in Minneapolis was $63,352, nearly $13,000 more than the national median.

Also Read: Seven States with No Income Tax

4. Seattle-Tacoma-Bellevue, Wash.
>Pct. say economy improving: 51.8%
>Pct. say economy getting worse: 43.1%
>Pct. say employers hiring: 39.9%
>Unemployment: 6.7%

Nearly 52% of Seattle metro area residents surveyed indicated the economy was getting better, the fourth-highest percentage in the nation. Additionally, Seattle ranked 12th overall for job creation, with nearly 40% of residents saying their businesses were hiring, versus 15.1% saying their employers were letting workers go. In recent years, Seattle’s unemployment rate has fallen from 9.2% in January 2011 to just 6.7% in January 2013. According to the Seattle Post-Intelligencer, increases in employment are not just benefiting workers, but also landlords who have been able to raise rents considerably throughout the surrounding metro area.

3. San Francisco-Oakland-Fremont, Calif.
>Pct. say economy improving: 54.7%
>Pct. say economy getting worse: 39.5%
>Pct. say employers hiring: 38.3%
>Unemployment: 7.6%

The San Francisco metropolitan area was one of just three in which less than 40% of residents surveyed said the economy was getting worse. It was also one of just four cities where more than 50% said the national economy was getting better. Job creation in the area was among the strongest, according to the Gallup poll, with just 13.5% of workers stating their employers were letting workers go. The San Francisco metropolitan area was one of the nation’s wealthiest as of 2011, when median household income was almost $72,000, sixth highest in the nation.

2. San Jose-Sunnyvale-Santa Clara, Calif.
>Pct. say economy improving: 56.2%
>Pct. say economy getting worse: 38.0%
>Pct. say employers hiring: 38.2%
>Unemployment: 7.9%

In San Jose, more than 56% of survey respondents said they felt the economy was getting better, higher than all metropolitan areas surveyed. The metropolitan area is home to numerous technology giants along with a host of other technology startups. Those in the technology industry have maintained employment levels better than workforces as a whole over the past few years. However, the San Jose metropolitan area ranked in the middle of all metropolitan areas in terms of job creation. Just over 38% of residents indicated that their company was hiring, while just over 15% of residents indicated that their company was letting workers go.

1. Washington-Arlington-Alexandria, D.C.-Va.-Md.-W.Va.
>Pct. say economy improving: 55.8%
>Pct. say economy getting worse: 38.9%
>Pct. say employers hiring: 38.2%
>Unemployment: 5.4%

The Washington, D.C., metropolitan area is the only area surveyed by Gallup where less than 30% of residents had a poor view of the present economy. Despite the fears that the federal government would be unable to resolve key debates in time to avoid the “fiscal cliff” in late 2012, residents were generally unlikely to perceive the economy negatively. Area residents were the second most likely in the nation, behind only the San Jose area, to say the economy was getting better at 55.8%. They were also the second least likely to say the economy was regressing, at 38.9%. One possible reason is that many area residents are already very wealthy. As of 2011, the Washington, D.C., area had the nation’s highest median income, at $86,680.

Also Read: Ten Countries That Hate America Most

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.