The city of Fresno has an overall grade of B- with a composite score ranking it at the 49.8th percentile among 50 US metros. The city's economic character is most defined by its high labor demand, with a composite score ranking at the 78th percentile, and its high unemployment rate, which is at the bottom tier with a 0th percentile rank. Specifically, Fresno's employment growth rate of 2.04% and weekly hours deviation of -1.744% indicate a strong labor market.
Labor Demand
Fresno's employment growth rate of 2.04% and weekly hours deviation of -1.744% signal genuine demand expansion, as hours are running below trend during a period of job growth. This combination indicates that the labor market is strong, with employers adding jobs and workers putting in fewer hours than expected. The labor demand composite score of 5.66 ranks at the 78th percentile, further supporting the notion of a robust labor market.
Unemployment
The unemployment rate in Fresno is 7.40%, ranking at the 0th percentile, indicating a loose labor market with significant slack. This means that businesses trying to hire in Fresno may find it easier to staff, but may also face weaker local consumer demand due to the high unemployment rate. The low unemployment percentile rank suggests that the city's labor market is not tight, giving employers more flexibility in hiring.
Wage Growth
Fresno's year-over-year wage growth rate is 5.16%, ranking at the 66th percentile, indicating moderate to fast wage growth. This implies that employer labor costs are rising, while worker purchasing power is increasing. The wage growth rate suggests that businesses in Fresno may face rising labor costs, but workers will have more disposable income to spend.
Cost of Living
Fresno's cost of living, with a PSF of $263/sqft and an hourly earnings rate of $33.46, resulting in a ratio of 7.86, ranks at the 54th percentile, indicating a near-median affordability level. This means that Fresno is neither extremely affordable nor expensive relative to its peers, and businesses may not need to offer significant wage premiums to attract talent. The city's affordability level is relatively stable, with a 0.0% year-over-year change in PSF.
Labor Force Growth
The civilian labor force in Fresno is growing at a rate of 0.00% year-over-year, ranking at the 66th percentile, indicating a stable labor force supply. This means that the workforce supply is neither expanding nor contracting significantly, and businesses may not face significant structural headwinds or tailwinds in hiring. The stable labor force growth rate suggests that Fresno's labor market is not experiencing significant changes in supply.
Building Permits
The year-over-year change in residential building permits in Fresno is -6.89%, ranking at the 37th percentile, indicating a tightening housing supply. This suggests that developer confidence is weakening, and future housing supply may not be expanding, potentially leading to affordability issues and challenges in accommodating a growing workforce. The decline in building permits signals a potential risk for future workforce attraction and retention.
Days on Market
The median days on market in Fresno is 55 days, with a year-over-year increase of 5.8%, ranking at the 53rd percentile. This indicates a relatively stable housing market, neither extremely competitive nor accessible, for workers relocating to the city. The rising days on market suggests a normalization of the housing market, but may not significantly impact relocating workers.
Office Economy
Fresno's professional and office worker share ranks at the 34th percentile, indicating a relatively shallow talent pool in these sectors. This means that Fresno is less suited for businesses requiring a deep knowledge-economy talent pool, such as tech, finance, or consulting, but may be more suitable for industries with fewer specialized roles, such as logistics or manufacturing.
The city of Fresno offers businesses a unique combination of a strong labor market and a loose labor market with significant slack, making it easier to hire but potentially facing weaker consumer demand. However, the single biggest risk or constraint for businesses in Fresno is the potential affordability issues and challenges in accommodating a growing workforce due to the declining building permits and tightening housing supply.