No. 8 Austin, Texas

Population: 1,533,263

Income Growth: 7%

Cost of Living Index: 94

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Median Household Income: $54,827

Percentage of Workforce in Creative Class: 37%

Leave it to Austin to ruin the curve. While most cities around the country posted job layoffs in the past year, Austin added 3,300 jobs, the biggest bump in the country. The increase covered a broad swath, from professional services, education and hospitality to health care and government. Gains in those sectors more than offset losses in manufacturing and information technology -- though the unemployment rate in the area has crept up.

Why the solid showing amid general economic gloom? Give most of the credit to government and higher education. State government employs 170,000, a fifth of the city's workforce; the University of Texas at Austin alone employs more than 6,000 people. As for the private sector, tech companies remain a driving force.

Austin's economy isn't all wonk and no play: Its thriving music scene culminates in South by Southwest, a music festival in March that enriches the local economy by more than $100 million per year.

NEXT: No. 9 Flagstaff

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