The Chicago-Naperville-Elgin metro area has an overall grade of C- with a composite score ranking it at the 28.5th percentile out of 50 US metros. This city's economic character is most defined by its low unemployment rate of 4.90% and its stagnant labor force growth rate of -1.66% YoY. The combination of these metrics suggests a tight labor market with limited supply of new workers.

Labor Demand

The employment growth rate in Chicago-Naperville-Elgin is -0.01% YoY, and weekly hours are deviating from the trend by +0.300%. This combination signals a survivor squeeze, where remaining workers are absorbing the load of eliminated roles, rather than genuine demand expansion. The labor demand composite score of 3.99 ranks near the median at the 40th percentile.

Unemployment

The unemployment rate in Chicago-Naperville-Elgin is 4.90%, ranking it at the 6th percentile, indicating a very tight labor market. This means that businesses trying to hire in this city will face significant competition for workers and may need to offer higher wages to attract talent. The low unemployment rate also suggests weaker local consumer demand due to a smaller pool of unemployed individuals.

Wage Growth

The year-over-year wage growth rate in Chicago-Naperville-Elgin is +3.59%, ranking it near the median at the 46th percentile. This moderate wage growth rate suggests that labor costs for employers are rising, but not excessively so. At the same time, workers in this city are experiencing an increase in their purchasing power, which can have positive effects on local consumer demand.

Cost of Living

Chicago-Naperville-Elgin has a cost of living score ranking it at the 27th percentile, with a PSF of $221/sqft and average hourly earnings of $36.81/hr, resulting in a ratio of 6.00. This indicates that the city is relatively expensive compared to its peers. The fact that PSF is rising by 1.8% YoY relative to wages makes it even less affordable. As a result, businesses may need to offer wage premiums to attract talent to this city.

Labor Force Growth

The civilian labor force in Chicago-Naperville-Elgin is contracting at a rate of -1.66% YoY, ranking it at the 12th percentile. This means that the supply of workers is shrinking, creating a structural headwind for hiring in this city. Businesses may need to consider alternative locations or strategies to attract workers from other areas.

Building Permits

The number of residential building permits in Chicago-Naperville-Elgin is decreasing by -1.45% YoY, ranking it near the median at the 43rd percentile. This suggests that housing supply is not expanding rapidly, which may lead to future affordability issues and constraints on workforce accommodation. However, the relatively slow decline in permits may not immediately impact the city's attractiveness to businesses.

Days on Market

The current median days on market in Chicago-Naperville-Elgin is 33 days, with a YoY change of +0.0%, ranking it at the 10th percentile. This indicates a relatively fast-paced market where homes are selling quickly, making it challenging for relocating workers to find accommodation. The stable YoY direction suggests that this trend is unlikely to change soon.

Office Economy

Chicago-Naperville-Elgin has an office economy score ranking it at the 36th percentile, with a share of professional and office workers at 2.10 out of 5. This suggests a moderately deep talent pool, making it suitable for businesses in the tech, finance, and consulting sectors. However, it may not be the best fit for businesses requiring a large pool of specialized workers or those in industrial or logistics-dominant sectors.

The Chicago-Naperville-Elgin metro area offers businesses a relatively tight labor market with moderate wage growth, but its low unemployment rate and shrinking labor force supply pose significant challenges for hiring and talent attraction. The single biggest risk or constraint for decision-makers is the city's relatively expensive cost of living, which may require wage premiums to attract and retain workers, potentially offsetting the benefits of operating in this location.