The future of the US economy is in the South

• The Southern region of the US is poised to play a bigger role in the American economy.
• The US population is clustering in the South, and economic growth has followed.
• Cities like Houston, Dallas, Nashville, and Miami could fuel future growth.

If you're searching for the future of the American economy, look South.

That's according to a report published on December 7 from Bank of America that compared population and economic trends across the Northeast, Midwest, West, and Southern regions of the United States.

Population growth is among the key drivers of economic growth, and Americans are clustering in the South. The 16 states that make up the region, per BofA, accounted for 39% of the entire US population as of 2022. Since 1960, the region has been responsible for nearly half of the increase in the US population.

While the US has experienced a population slowdown in recent years, the South has the highest birth rate of any region, per BofA. And people who were born in the region tend to stick around. Eighty-two percent of Texans born in the state still resided there as of 2021, the highest rate in the US, according to an August Dallas Fed analysis. North Carolina and Georgia rounded out the top three.

Even Americans who weren't born in the South are moving there in high numbers. Between July 2021 and 2022, Florida, South Carolina, and Texas were among the four fastest-growing states by population in the nation.

Newcomers are entering a hot job market. The South has the highest job openings rate and the lowest unemployment rate of any region, per BofA. What's more, in recent months, the region has seen the largest uptick in credit card spending. If these trends persist, economic and societal power could shift away from colossal coastal cities such as New York and San Francisco to cities like Houston, Dallas, Nashville, and Miami.

"You used to have two coastal power zones where you could live your best life, never really touching down in the red states," Niall Ferguson, a Stanford historian, told Barron's. "We now have much more of a multipolar America rather than a bipolar America. That reflects taxes, quality of life, cost of living, the ability to build, and incredibly striking differentials in quality of governance."

Houston's energy economy, Miami's proximity to Latin America and growing financial industry, Dallas's blossoming environment of diversified business behemoths, and Nashville's status as a healthcare and tech hub could position each of these Southern cities to thrive in the future.

Americans could keep moving to these cities in the years ahead. A Redfin report from March used search data to determine the 10 US cities Americans were most interested in moving to and from. San Francisco, New York, and Los Angeles topped the list of areas Americans wanted to leave, and no Southern cities were in the top 10. Meanwhile, seven Southern cities — including Miami, Dallas, and Houston — were among the top 10 cities users were interested in moving to.

Despite the South's economic gains, the region's future could come with some obstacles.

To varying degrees, some Southern cities are already seeing how high housing costs can plague an area with surging demand. Additionally, the region's high temperatures could make it vulnerable to the ongoing climate crisis.

Even today, it's not clear to what extent the South's economic progress is satisfying residents. A BofA survey included in the report found that Southern respondents were the most optimistic of any region that their finances would improve over the next months — but they were the most pessimistic of any region about the current state of their finances. It appears to be yet another example of economic data not quite aligning with Americans' feelings about the economy.

But if the South's positive economic trends persist, its residents should end up better off in the long run.

Have you moved to the South over the past few years and are willing to share why you relocated? If so, reach out to this reporter at jzinkula@insider.com.