HUNTSVILLE -- Huntsville was ranked second out of 387 metro areas - and Mobile was No. 4 - in Moody's Economy's latest report on expected employment growth.

The Huntsville economy is beginning to recover from the recession, bolstered by the federal economic stimulus, the increased demand for durable goods and the ongoing relocation of federal and military jobs resulting from the 2005 Base Realignment and Closure Commission decision, according to Martin Soler Garcia, an assistant economist for Moody's Economy.com.

In his analysis, Garcia predicts employment in Huntsville will grow 2.5 percent this year and 4.3 percent, 4.8 percent and 4.4 percent for the following three years. Personal income will increase by 3.1 percent this year, and grow by 5.4 percent, 7.3 percent and 7.1 percent over the following three years, according to the report.

Garcia forecasts the Huntsville area jobless rate, which in December was 8.1 percent for the Huntsville metro area, which includes Limestone County, will be 9.1 percent this year, then 8.2 percent in 2011, 6.5 percent in 2012 and 5.7 percent in 2013. The Madison County jobless rate was 7.7 percent in December.

Other Alabama communities' rankings in anticipated employment growth were Auburn-Opelika area, No. 23; Montgomery, 29; Birmingham-Hoover area, 53; and Tuscaloosa, 61.

The report also put Huntsville in the No. 1 spot in a ranking of the metro areas' risk-adjusted return for the period 2008-2013. The risk-adjusted return determines if a regional economy's growth compensates for its volatility; a positive value indicates that projected job growth compensates for the volatility in the region's job growth.

Brian Hilson, president and CEO of the Huntsville/Madison County Chamber of Commerce, said the study and, in particular, the risk-adjusted return ranking "validates what we've recognized for a long time. The Huntsville metro area has a well-diversified, growing economy that represents one of the best investments a company can make out of all 387 metro areas in the country."

It's significant, Hilson said, that four Alabama metro areas were in the top seven and five were in the top 17 in the risk-adjusted return ranking.

"We're seeing a lot of potential for growth across the board," including the defense industry and in the healthcare, technology and automotive fields, said Huntsville Mayor Tommy Battle. "Our job is to make sure those potentials become a reality."

The report noted two Huntsville strengths: per capita income well above state trends, and the University of Alabama in Huntsville becoming increasingly competitive. The weaknesses: high exposure to durable-goods manufacturing, susceptibility to changes in federal government spending priorities and remote location far from larger metro areas.

The November report was compiled for Moody's by Precis Metro, and the findings were released this week by Gov. Bob Riley.

"We're beginning to see evidence that Alabama's economy is improving and this report validates that," Riley said in a release.

"This is a strong indication that pockets in Alabama's economy are growing and those areas will provide a positive impact on the economy of the entire state," Neal Wade, director of the Alabama Development Office, said in a release. "Other economic indicators also project that the state's economy will begin to recover late this year and into 2011 especially as we see major projects that were recruited several years ago begin to start up operations this year."