Kansas City earns an overall grade of A+ with a composite score of 68.7th percentile, ranking it among the top US metros. The city's economic character is defined by its strong wage growth, with a year-over-year increase of 6.99%, and its highly affordable cost of living, with a percentile rank of 90th. These metrics signal a city with a competitive labor market and attractive living conditions.
Labor Demand
Kansas City's employment growth rate is 0.04% year-over-year, combined with a 0.223% deviation in weekly hours above its own trend, resulting in a labor demand composite score of 4.58, which is near the median. This combination signals a genuine demand expansion, as hours are running above trend during a period of job growth. The labor market is experiencing a moderate increase in jobs and working hours.
Unemployment
The unemployment rate in Kansas City is 3.90%, which corresponds to an above-average percentile rank of 72nd. This indicates a relatively tight labor market with some slack, making it moderately challenging for businesses to hire. However, the unemployment rate is still low enough to exert some upward pressure on wages.
Wage Growth
With a year-over-year wage growth rate of 6.99%, Kansas City is experiencing fast wage growth, ranking it in the top tier at the 88th percentile. This rapid wage growth implies rising labor costs for employers, but it also translates to strong purchasing power for workers. Businesses should factor in the potential for increasing labor costs when considering relocation.
Cost of Living
Kansas City's cost of living is highly affordable, with a percentile rank of 90th, due to its PSF of $199/sqft and average hourly earnings of $35.79, resulting in a ratio of 5.56. This affordability advantage means that businesses can attract talent without needing to offer significant wage premiums, making it an attractive location for companies looking to relocate or expand.
Labor Force Growth
The civilian labor force in Kansas City is growing at a rate of 0.37% year-over-year, which is above average, ranking it at the 64th percentile. This expansion in labor force supply indicates that the city has a growing pool of potential workers, making it easier for businesses to find and hire talent.
Building Permits
The number of building permits in Kansas City has increased by 34.49% year-over-year, signaling a significant expansion in housing supply. This growth in permits suggests that the city is likely to experience improving affordability and a more accommodating environment for its workforce in the future.
Days on Market
The current median days on market in Kansas City is 41 days, with a year-over-year decrease of 12.8%, ranking it in the bottom tier at the 8th percentile. This fast-paced market means that homes are selling quickly, which can make it challenging for relocating workers to find and secure housing.
Office Economy
Kansas City's professional and office worker share is below average, ranking it at the 26th percentile. This indicates a relatively shallow talent pool for businesses in the tech, finance, or consulting sectors, making it less suited for companies that require a deep knowledge-economy workforce. However, it may be more suitable for industries with different workforce requirements.
In conclusion, Kansas City offers businesses a unique combination of strong wage growth, affordable living conditions, and a growing labor force, making it an attractive location for relocation or expansion. However, the single biggest risk or constraint for decision-makers to consider is the fast-paced housing market, which may pose challenges for relocating workers to find suitable housing, potentially affecting talent attraction and retention strategies.