Cleveland, with an overall grade of B- and a composite score ranking it at the 49.4th percentile among 50 US metros, is characterized by its near-median labor demand and above-average unemployment rate, which are the two metrics that most define its current economic character, with employment growth at +0.57% and an unemployment rate of 3.40%. The city's labor market is further influenced by its low wage growth and relatively stable cost of living. Specifically, the labor demand composite score of 5.27 and the unemployment rate percentile of 66th are key indicators of the city's economic state.

Labor Demand

The employment growth rate of +0.57% and weekly hours deviation of +0.170% from the city's own trend suggest a genuine demand expansion, albeit at a moderate pace. This combination indicates that the city is experiencing job growth, and the increase in hours worked suggests that the existing workforce is being utilized more intensively. The labor demand composite score of 5.27, ranking at the 48th percentile, further supports this assessment.

Unemployment

The unemployment rate of 3.40% ranks at the 66th percentile, indicating a relatively tight labor market. This means that there is less slack in the market, making it more challenging for businesses to hire new employees. As a result, businesses may face upward pressure on wages to attract and retain talent in this market.

Wage Growth

The year-over-year wage growth rate of +0.88% is relatively low, ranking at the 10th percentile. This slow wage growth implies that labor costs for employers are not rising rapidly, but it also means that workers have limited bargaining power and may not see significant increases in their purchasing power. This could impact the overall attractiveness of the city to workers and businesses alike.

Cost of Living

With a cost of living ratio of 4.17, based on $143/sqft and $34.26/hr, and a percentile rank of 50th, Cleveland is neither particularly affordable nor expensive relative to its peers. The fact that PSF is increasing by 13.5% YoY while wages are growing slowly may put upward pressure on this ratio in the future. This neutral cost of living situation means that businesses may not need to offer significant wage premiums to attract talent, but it also does not provide a strong competitive advantage in terms of affordability.

Labor Force Growth

The civilian labor force is growing at a rate of +1.80% year-over-year, ranking at the 94th percentile. This indicates that the workforce supply is expanding rapidly, which is a positive sign for businesses looking to hire. The growing labor force provides a larger pool of potential employees, making it easier for companies to find the talent they need.

Building Permits

The year-over-year change in residential building permits is -16.61%, ranking at the 22nd percentile. This decline suggests that housing supply is tightening, which could lead to future affordability issues and challenges in accommodating a growing workforce. The decrease in building permits may signal a potential supply squeeze, making it more difficult for workers to find affordable housing.

Days on Market

The current median days on market is 55 days, with a year-over-year increase of 7.8%. This ranks at the 66th percentile, indicating a slower market. For workers relocating to Cleveland, this means that they may have a more accessible and less competitive housing market, giving them more time to find a suitable home.

Office Economy

With an office/professional worker share of 2.86 and a percentile rank of 60th, Cleveland has a relatively deep talent pool in professional and office sectors. This makes the city more suited for businesses in tech, finance, consulting, and HQ decisions, but less ideal for industries with more industrial or logistics-oriented economies.

In conclusion, Cleveland offers businesses a growing labor force and a relatively stable cost of living, but its slow wage growth and tightening housing supply are significant concerns. The single biggest risk or constraint for a decision-maker is the potential for future affordability issues and workforce accommodation challenges due to the decline in building permits, which could impact the city's ability to attract and retain talent.