The Houston-Pasadena-The Woodlands metro area has an overall grade of C+ with a composite score ranking it at the 45.1th percentile out of 50 US metros. This city's economic character is most defined by its near-median labor demand composite score of 5.20 and its below-average unemployment rate of 4.60%. The combination of these metrics suggests a mixed economic environment, with labor demand and unemployment rates that are not exceptionally strong or weak.

Labor Demand

The employment growth rate in Houston-Pasadena-The Woodlands is +0.97% year-over-year, while weekly hours are deviating -0.457% from the city's own 12-month baseline. This combination signals a moderate labor demand expansion, as the city is adding jobs, but the hours worked are slightly below trend. This suggests that the labor market is growing, but not at a rapid pace.

Unemployment

The unemployment rate in Houston-Pasadena-The Woodlands is 4.60%, which ranks at the 30th percentile, indicating a below-average labor market with some slack. This means that businesses may find it relatively easier to hire workers, but may also face weaker local consumer demand. The practical implication for a business trying to hire here is that they may have a larger pool of potential candidates to choose from.

Wage Growth

The year-over-year wage growth rate in Houston-Pasadena-The Woodlands is +2.25%, which ranks at the 26th percentile, indicating below-average wage growth. This suggests that labor costs for employers are rising, but at a moderate pace, and worker purchasing power is increasing, but not rapidly. As a result, businesses may face some upward pressure on wages, but it is not extreme.

Cost of Living

Houston-Pasadena-The Woodlands has a cost of living score that ranks at the 76th percentile, indicating that it is more affordable than many of its peer cities. The city's PSF of $168/sqft is decreasing at a rate of -2.3% year-over-year, relative to average hourly earnings of $37.07/hr, resulting in a ratio of 4.53. This means that the city has a talent attraction advantage, as workers can afford to live here without requiring significant wage premiums.

Labor Force Growth

The civilian labor force in Houston-Pasadena-The Woodlands is growing at a rate of +0.69% year-over-year, which ranks at the 70th percentile, indicating an above-average expansion of the labor force. This means that the supply of workers is increasing, which is a positive sign for businesses looking to hire. As a result, the city's hiring capacity is likely to improve.

Building Permits

The number of residential building permits in Houston-Pasadena-The Woodlands is decreasing at a rate of -9.16% year-over-year, which ranks at the 32nd percentile, indicating a below-average expansion of housing supply. This suggests that the city's housing supply is tightening, which may lead to future affordability issues and challenges in accommodating a growing workforce.

Days on Market

The median days on market for homes in Houston-Pasadena-The Woodlands is 57 days, with a year-over-year change of +0.0%, which ranks at the 30th percentile. This indicates a relatively fast-paced market, where homes are selling quickly. As a result, workers relocating to this city may face a competitive housing market, which could make it challenging to find a home.

Office Economy

Houston-Pasadena-The Woodlands has a deep professional talent pool, with an office economy score that ranks at the 82nd percentile. This makes the city well-suited for businesses in the tech, finance, consulting, and HQ sectors, which require a high concentration of specialized workers. However, the city may be less suitable for businesses in industrial or logistics-dominant sectors.

The Houston-Pasadena-The Woodlands metro area offers businesses a mixed economic environment, with some positive signs such as labor force growth and affordability, but also some challenges like tightening housing supply and moderate labor demand. The single biggest risk or constraint for a decision-maker to factor in is the potential for future affordability issues and workforce accommodation challenges, which could impact the city's ability to attract and retain talent.