Recent Updates to Metropolitan Statistical Areas in the Fifth District

Changes to the Richmond Fed's Regional Economic Snapshot

The Richmond Fed hosts many timely data products on its website that help inform our readers of economic activity. For example, our Regional Economic Snapshot provides updates on Fifth District labor markets, housing conditions, and other state and local economic indicators. The data we use primarily comes from federal government sources, but recent changes to how federal agencies define metro areas affect our reporting.

It is common to hear the phrase "metro area" refer to a city and its surrounding area, often in the context of traffic jams, the weather forecast, or someone's hometown. But when economists or policymakers talk about a metro area — or metropolitan statistical area (MSA) — they are referring to a defined geographic and economic unit that is an important feature of the U.S. economy. For example, metro areas account for about 86 percent of the population within the United States and over 90 percent of the nation's gross domestic product (GDP). The Fifth District's MSAs had a combined GDP of approximately $2.5 trillion^1,2, with the Washington-Arlington-Alexandria, DC-VA-MD-WV MSA, accounting for approximately $600 billion, the highest within the Fifth District.

MSAs include a principal city, the most populous city in the area, and its surrounding counties as measured by commuting ties: If 25 percent or more of the residents in a surrounding county travel to the principal city for work (or vice versa), then the county is included in the MSA. This means that not all counties in an MSA have a large or dense population. If a sparsely populated county meets the commuting criteria, it can be considered part of a large metro area. For example, the Virginia Beach-Chesapeake-Norfolk, VA-NC MSA, is one of the largest metro areas in the Fifth District, with a population of almost 3 million. However, Surry County, Virginia, which is part of that metro area, is quite rural.

Similar to an MSA, a micropolitan statistical area is an area with a smaller population. These areas still have a principal city and surrounding counties that are included if they meet the same commuting threshold as required for an MSA.

Every 10 years, the U.S. Census Bureau provides an updated picture of the geographic distribution of the American population. About three years after the census data is completed, the Office of Management and Budget (OMB) uses the data to redraw the nation's metropolitan and micropolitan statistical areas. Frequently, the OMB will update geographic areas in between the Census Bureau with the most up-to-date population estimates, commuting patterns, and other data from the American Community Survey and similar federal data products. Then, federal agencies use these new areas to aggregate economic data³. Because this is a time-intensive process, the new delineations from the OMB were implemented at the federal agency level a few months ago. As a result, there were numerous changes within the Fifth District.

What Changed in the Fifth District?

Out of the 48 unique MSAs in 2020, almost 50 percent (22 metro areas) experienced some change in the updated definitions. These changes ranged from the addition or removal of principal cities to the creation and discontinuation of MSAs. For example, Pinehurst-Southern Pines, NC, was a micropolitan in 2020 but became an MSA with the 2023 changes. This change was due to population growth and how the Census Bureau defines urban areas, meaning it surpassed the 50,000-population threshold for an MSA. Conversely, the Cumberland, MD-WV MSA became a micropolitan area as its principal city no longer met the population requirements. Only one MSA was discontinued: California-Lexington Park, MD. This was due to sizable changes in the composition of the MSA with the addition of Calvert County, and the removal of California as a principal city. As a result, OMB retired that MSA label and instituted the Lexington Park, MD MSA label.

Eleven MSAs in the Fifth District experienced compositional changes that did not result in their discontinuation. As counties are added or removed from an MSA, the naming convention might change slightly, but usually it is negligible enough that it does not warrant discontinuing an MSA and establishing an entirely new MSA label. The Myrtle Beach-Conway-North Myrtle Beach, SC-NC MSA was renamed the Myrtle Beach-Conway-North Myrtle Beach, SC MSA due to the removal of Brunswick County in North Carolina. This change did not warrant an entirely new MSA since Brunswick's removal did not substantially change the economic or demographic characteristics of the Myrtle Beach metro area.

Closing Thoughts

Metro area definitions affect how federal, state, and local policymakers create policies that are relevant to the distribution of households, businesses, and economic activity. Of course, the definitions also impact how we at the Richmond Fed report, analyze, and better understand our Fifth District. In addition to Snapshot, there are numerous data products, like the Monthly Business Surveys and The CFO Survey that we use to make sense of economic trends to inform our communities.

Views expressed are those of the author(s) and do not necessarily reflect those of the Federal Reserve Bank of Richmond or the Federal Reserve System.