The Houston-Pasadena-The Woodlands metro area has an overall grade of B- with a composite score ranking at the 47.6th percentile out of 50 US metros. This city's economic character is most defined by its strong labor demand, with a composite score in the 74th percentile, and its high cost of living affordability, ranking in the 82nd percentile. The labor demand is driven by a combination of employment growth and hours worked above trend, signaling genuine demand expansion.

Labor Demand

The employment growth rate in Houston-Pasadena-The Woodlands is 1.30% year-over-year, and weekly hours are 0.091% above the city's own 12-month trend. This combination signals genuine demand expansion, as hours are running above trend during a period of job growth. The labor demand composite score of 6.21 is in the 74th percentile, indicating a strong job market.

Unemployment

The unemployment rate in Houston-Pasadena-The Woodlands is 5.10%, ranking in the 8th percentile, indicating a relatively loose labor market. This means that there is some slack in the market, making it easier for businesses to hire workers. However, the relatively high unemployment rate also suggests weaker local consumer demand.

Wage Growth

The year-over-year wage growth in Houston-Pasadena-The Woodlands is 1.21%, ranking in the 12th percentile, indicating stagnant wage growth. This slow wage growth means that labor costs for employers are not rising rapidly, but it also implies weak bargaining power for workers and limited growth in worker purchasing power.

Cost of Living

Houston-Pasadena-The Woodlands has a cost of living score in the 82nd percentile, with a price-to-salary ratio of $169/sqft to $36.92/hr, or 4.58. The fact that the PSF is falling by 2.3% year-over-year relative to wages makes the city more affordable. This high affordability score is a talent attraction advantage, as workers can be drawn to the area without requiring significant wage premiums.

Labor Force Growth

The civilian labor force in Houston-Pasadena-The Woodlands is growing at a rate of 0.28% year-over-year, ranking in the 64th percentile. This positive growth rate indicates that the workforce supply is expanding, which is a positive sign for businesses looking to hire. However, the growth rate is relatively modest, which may limit the city's ability to support rapid hiring.

Building Permits

The number of residential building permits in Houston-Pasadena-The Woodlands is falling by 6.61% year-over-year, ranking in the 42nd percentile. This decline in permits suggests that the housing supply is tightening, which may lead to future affordability challenges and limitations on workforce accommodation.

Days on Market

The median days on market for homes in Houston-Pasadena-The Woodlands is 52 days, with a year-over-year increase of 2.0%. This relatively moderate days on market suggests a balanced market that is neither extremely competitive nor extremely accessible for relocating workers.

Office Economy

The share of professional and office workers in Houston-Pasadena-The Woodlands is ranked in the 84th percentile, indicating a deep talent pool suited for tech, finance, consulting, and HQ decisions. This city is well-suited for businesses that require specialized knowledge-economy workers, but may be less suitable for industrial or logistics-dominant businesses.

The Houston-Pasadena-The Woodlands metro area offers businesses a strong labor demand and an affordable cost of living, making it an attractive location for talent attraction and retention. However, the single biggest risk or constraint for decision-makers is the stagnant wage growth, which may limit worker purchasing power and local consumer demand, potentially impacting businesses that rely on a strong local economy.