Regions across the U.S. will see job growth in the first quarter of 2010. But the growth will be sporadic and many areas will continue to lag

The recession might be technically over, but unemployment is rising month after month even in most of the nation's strongest job markets.

A full-fledged job recovery seems to be a long way away. But some metros are poised for significant job growth by the first quarter of next year. BusinessWeek.com teamed up with Moody's Economy.com to identify America's 25 next recovering job markets. These metros were ranked based on Economy.com's projected job growth in the first three months of 2010.

Topping the list is Mount Vernon, Wash., a small town about 60 miles north of Seattle with just 48,000 workers. The town, which lost jobs quickly during the recession, could see a rebound, in part because tourism, retail, and hospitality will make a comeback as the economy improves. Additionally, the weak dollar will provide a boost to communities with international trading ports and metros that border Mexico, such as Brownsville, Tex. (a port town that is No. 4 on our list), and border town McCallen, Tex. (No. 3). Our list was also packed with towns that are closely linked to the energy industry (Billings, Mont., Houston, Tex., and Farmington, N.M.), college towns (College Station, Tex., Tuscaloosa, Ala., Auburn, Ala., and Lawrence, Kan.), and military towns (Columbus, Ga., Augusta, Ga., and Texarkana, Tex.).

None of the metros on the list experienced a housing bubble that had a disastrous pop. Miami, Las Vegas, Phoenix, and Stockton, Calif., will likely be in a funk long after many Texas metros are in growth mode.

"These are areas that had little or no housing cycle and stand to benefit from the renewed firmness in commodity prices," said Chris Lefakis, an economist at Moody's Economy.com. "This could be an export-lead recovery with the replenishment of inventory leading to a resurgence in manufacturing."

Room for Growth in Manufacturing

The manufacturing sector has taken such a battering that it has a lot of room for improvement. Inventories have fallen to such low levels that manufacturers will have to increase production even to keep up with existing demand, Lefakis said.

A plant opening or just expanding can have a magnified impact on a small metro, giving a swift boost to the job market, said Joel Naroff, president of Naroff Economic Advisors in Holland, Pa. But job growth elsewhere mostly will be slow and incremental, he said. Companies will be cautious about hiring and will expand overtime hours and bring on temporary workers before making permanent hires.

The good news is that overtime pay and the increase in temp workers will push up wages nationwide, which could result in more consumer spending, he said.

"If the economy begins to grow, it will be enough [for companies] to add slowly to payroll," Naroff said. "I'm not expecting a vigorous upturn."

Travel, hospitality, and retail could see more dramatic growth. Throughout the recession, Americans have cut down on travel, eating out, and shopping. If the economy improves, they'll add more entertainment to their budgets, he said.

"People might not go to Disney World," said Naroff. "But they might start going out to dinner once week."

New York City, which didn't make our list, could also have a great year, especially now that Wall Street is giving out bonuses "like 2008 never existed," he added.

The federal government will also play a key role in the recovery even as it begins to phase out tax incentives and other economic stimulus spending, Moody's Economy.com Chief Economist Mark Zandi said on CNBC Nov. 3.

"Without the government, the consumer would be pulling back," Zandi said. "By early next year job losses will abate … so we will start to see wage and salary growth and government can begin to pass that baton off [to the private sector]. But it will be a tricky handoff."

America's 10 Next Recovering Job Markets

1. Mount Vernon, Wash.

Q1 2010 annualized job growth: 2.7%
Q3 2009 annualized job growth: -4%

First quarter of recovery: Q4 2009
Unemployment rate: 10.1%
Median household income: $53,656

Mount Vernon, a small town in the Skagit Valley, about 60 miles north of Seattle and 80 miles south of Vancouver, has a historic downtown, nearby whale-watching tours, eagle-watching and kayaking. The town's small job market has retracted significantly and could be poised for a rebound. Mount Vernon's relative affordability makes it an attractive alternative to Seattle.

2. Huntsville, Ala.

Q1 2010 annualized job growth: 2.6%
Q3 2009 annualized job growth: -2%

First quarter of recovery: Q4 2009
Unemployment rate: 8%
Median household income: $51,798

Huntsville's strong economy is likely to get stronger. Builders are busy putting up new apartments and houses to accommodate hundreds of families moving into the area as part of the Base Realignment & Closure consolidations at Redstone Arsenal. In addition to the arsenal, the city is known as the home of the U.S. Space & Rocket Center, where scientists designed space rockets in the 1950s and visitors now come for interactive exhibits, rides, and movies.

3. McAllen, Tex.

Q1 2010 annualized job growth: 2.6%
Q3 2009 annualized job growth: 5.6%

First quarter of recovery: Q4 2009
Unemployment rate: 11.8%
Median household income: $30,157

McAllen, an affordable town about 10 miles from the Mexican border, is growing quickly with the arrival of immigrants, including wealthy Mexican homeowners. The health-care, education, and business sectors are expanding to accommodate the new residents.

4. Brownsville, Tex.

Q1 2010 annualized job growth: 2.2%
Q3 2009 annualized job growth: 1.7%

First quarter of recovery: Q4 2009
Unemployment rate: 10.9%
Median household income: $29,519

Brownsville, with a population of nearly 200,000, is booming in large part because of the Port of Brownsville, the state's southernmost international seaport. The weakening dollar could continue to give a boost to exporters in the coming year.

5. Auburn, Ala.

Q1 2010 annualized job growth: 1.9%
Q3 2009 annualized job growth: -1.8%

First quarter of recovery: Q4 2009
Unemployment rate: 8.8%
Median household income: $39,299

Auburn, a small college town located just west of the Georgia border, is centered around Auburn University, which employs more than 7,000 people. Small college towns have been relatively protected during the recession.

6. Lawrence, Kan.

Q1 2010 annualized job growth: 1.8%
Q3 2009 annualized job growth: -11.5%

First quarter of recovery: Q1 2010
Unemployment rate: 5.5%
Median household income: $51,803

Despite its recently slowing job market, Lawrence has a robust unemployment rate of just 5.5%. Lawrence is home to the University of Kansas and—like many other small college towns—it is likely to pull out of the recession relatively quickly. The politically progressive town draws retirees and other newcomers with its affordable cost of living and cultural offerings.

7. Dallas

Q1 2010 annualized job growth: 1.7%
Q3 2009 annualized job growth: -0.5%

First quarter of recovery: Q1 2010
Unemployment rate: 8.5%
Median household income: $55,591

Texas' Dallas metro has a diverse economy that held up well during the recession. It is home to major corporations such as ExxonMobil, J.C. Penney, and TXU Energy; it also has a major international airport and professional sports teams.

8. Laredo, Tex.

Q1 2010 annualized job growth: 1.6%
Q3 2009 annualized job growth: -2.1%

First quarter of recovery: Q1 2010
Unemployment rate: 9.5%
Median household income: $34,048

Fast-growing Laredo is known as the "Gateway City" because it is one of the busiest entry points into the U.S. from Mexico. The metro benefits from vigorous cross-border trade.

9. Las Cruces, N.M.

Q1 2010 annualized job growth: 1.5%
Q3 2009 annualized job growth: -5.7%

First quarter of recovery: Q1 2010
Unemployment rate: 7.4%
Median household income: $38,424

Las Cruces, home of New Mexico State University, is both a border town and a college town, which should keep the job market relatively strong into next year.

10. Billings, Mont.

Q1 2010 annualized job growth: 1.5%
Q3 2009 annualized job growth: -3.5%

First quarter of recovery: Q1 2010
Unemployment rate: 5.1%
Median household income: $49,386

Billings, the state's largest city, has a strong and diverse economy fed by agriculture, mining, energy, education, and health care. Its energy sector, which includes oil refineries, natural gas, and coal, is likely to help keep the local economy strong into next year.

Click here to see all 25 Next Recovering Job Markets

Methodology: The metropolitan statistical areas were ranked based on Moody's Economy.com job growth forecasts for the first quarter next year. The first quarter of recovery is the first quarter in which metro payrolls began to expand. The metro unemployment rate was for September 2009 and was provided by the Bureau of Labor Statistics. The median household income came from U.S. Census.