The Boston-Cambridge-Newton metro area has an overall grade of B- with a composite score ranking it 45.4th percentile out of 50 US metros. This city's economic character is most defined by its strong labor force growth, with a 2.87% year-over-year increase, and its high building permits growth, with an 87.24% year-over-year change. These metrics signal a city with a expanding workforce and a confident developer community.

Labor Demand

The Boston-Cambridge-Newton metro area has an employment growth rate of -0.12% and a weekly hours deviation of -0.351% from its own trend, resulting in a labor demand composite score of 4.13, which ranks in the 26th percentile. This combination signals a contraction in labor demand, indicating that the city is not adding jobs at a significant rate and hours worked are below trend. This suggests a lack of genuine demand expansion in the labor market.

Unemployment

The unemployment rate in Boston-Cambridge-Newton is 3.90%, ranking in the 32nd percentile, indicating a moderate level of slack in the labor market. While the market is not extremely tight, it is still relatively competitive, with some wage pressure likely. For a business trying to hire in this city, this means that finding the right talent may require some effort, but it is not an extremely challenging market.

Wage Growth

The year-over-year wage growth in Boston-Cambridge-Newton is 2.93%, which ranks in the 32nd percentile, indicating moderate wage growth. This rate is not extremely high, but it is still positive, suggesting that labor costs for employers are rising, albeit slowly. At the same time, worker purchasing power is increasing, which can have a positive impact on local consumer demand.

Cost of Living

Boston-Cambridge-Newton has a cost of living score that ranks in the 20th percentile, with a PSF of $458/sqft and average hourly earnings of $45.83/hr, resulting in a ratio of 9.99. This indicates that the city is relatively expensive compared to its peers. The fact that PSF is falling by 1.5% year-over-year is a positive sign, but overall, the city's high cost of living may require businesses to offer wage premiums to attract talent.

Labor Force Growth

The civilian labor force in Boston-Cambridge-Newton is growing at a rate of 2.87% year-over-year, which ranks in the 98th percentile, indicating a rapidly expanding workforce. This means that the supply of potential employees is increasing, making it easier for businesses to find the talent they need. This is a significant advantage for companies looking to hire in the city.

Building Permits

The number of building permits in Boston-Cambridge-Newton has increased by 87.24% year-over-year, ranking in the 94th percentile, indicating a significant expansion of housing supply. This suggests that developer confidence is high, and the city is likely to see an increase in available housing, which can improve affordability and make it easier for workers to relocate to the area.

Days on Market

The median days on market in Boston-Cambridge-Newton is 51 days, with a year-over-year increase of 13.3%, ranking in the 88th percentile. This indicates a relatively slow market, with homes taking longer to sell. For a worker relocating to this city, this means that they may have a more accessible and less competitive housing market, making it easier to find a home.

Office Economy

Boston-Cambridge-Newton has an office economy score that ranks in the 56th percentile, with a share of professional and office workers of 2.70 out of 5. This indicates a moderate depth of professional talent pool, making the city suitable for businesses in the tech, finance, and consulting sectors, but less ideal for industrial or logistics-dominant companies.

The Boston-Cambridge-Newton metro area offers businesses a unique combination of a rapidly expanding workforce and a confident developer community, with a moderate level of wage growth and a relatively expensive cost of living. However, the single biggest risk or constraint for decision-makers is the city's relatively high cost of living, which may require businesses to offer wage premiums to attract and retain talent.