The Austin-Round Rock-San Marcos metro area has earned an overall grade of A+ with a composite score of 73.1th percentile, ranking it among the top US metros. The city's economic character is largely defined by its exceptional wage growth, with a year-over-year increase of 7.75%, and its highly affordable cost of living, with a PSF to wages ratio of 6.24. These two metrics signal a strong and attractive labor market.

Labor Demand

The employment growth rate in Austin-Round Rock-San Marcos is 1.13% year-over-year, while weekly hours are deviating -1.208% from the city's own trend. This combination signals genuine demand expansion, as the city is adding jobs and hours are running slightly below trend, indicating a healthy labor market. The labor demand composite score of 4.67 further supports this assessment, ranking above average at the 62th percentile.

Unemployment

The unemployment rate in Austin-Round Rock-San Marcos is 3.40%, ranking above average at the 78th percentile. This indicates a relatively tight labor market with some slack, making it moderately challenging for businesses to hire. However, the low unemployment rate also suggests that the city has a skilled and employed workforce, which can be beneficial for businesses looking to tap into a talented labor pool.

Wage Growth

The year-over-year wage growth in Austin-Round Rock-San Marcos is 7.75%, ranking at the 92th percentile. This rapid wage growth signals rising labor costs for employers, but also increasing worker purchasing power. As a result, businesses may need to adjust their compensation packages to remain competitive, while also benefiting from a workforce with growing disposable income.

Cost of Living

Austin-Round Rock-San Marcos has a cost of living percentile rank of 96th, indicating that it is highly affordable relative to its peers. The city's PSF to wages ratio is 6.24, with PSF decreasing by 7.7% year-over-year. This affordability advantage makes the city an attractive destination for talent, as workers can maintain a high standard of living without requiring excessive wage premiums.

Labor Force Growth

The civilian labor force in Austin-Round Rock-San Marcos is growing at a rate of 0.81% year-over-year, ranking above average at the 74th percentile. This expansion of the labor force supply indicates that the city has a growing pool of potential workers, making it easier for businesses to hire and expand their operations.

Building Permits

The number of residential building permits in Austin-Round Rock-San Marcos has decreased by 19.65% year-over-year, ranking below average at the 22th percentile. This decline in building permits signals a potential tightening of the housing supply, which could lead to decreased affordability and increased competition for workforce accommodation in the future.

Days on Market

The median days on market for homes in Austin-Round Rock-San Marcos is 51 days, with a year-over-year increase of 15.9%. This ranks at the 86th percentile, indicating a relatively slow market. For workers relocating to the city, this means a more accessible and less competitive housing market, making it easier to find and secure a home.

Office Economy

The share of professional and office workers in Austin-Round Rock-San Marcos is ranked at the 92th percentile, indicating a deep and talented pool of knowledge-economy workers. This makes the city an ideal location for businesses in the tech, finance, consulting, and HQ sectors, but less suited for industries with more industrial or logistics-oriented workforces.

The Austin-Round Rock-San Marcos metro area offers businesses a unique combination of strong wage growth, affordable cost of living, and a talented labor pool, making it an attractive destination for investment and expansion. However, the single biggest risk or constraint for decision-makers is the potential tightening of the housing supply, which could lead to decreased affordability and increased competition for workforce accommodation in the future.