The Los Angeles-Long Beach-Anaheim metro area has an overall grade of B- with a composite score ranking at the 49.1th 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 top tier at the 88th percentile, and its high cost of living, ranking in the bottom tier at the 4th percentile, with a PSF to earnings ratio of $652/sqft to $41.54/hr, or 15.70. The labor demand and cost of living metrics are crucial in understanding the city's current economic landscape, with employment growth at 1.83% and weekly hours 0.151% above trend.

Labor Demand

The Los Angeles-Long Beach-Anaheim metro area has an employment growth rate of 1.83% and weekly hours 0.151% above its own 12-month baseline, signaling genuine demand expansion. This combination indicates that the city is experiencing a period of job growth, with hours worked above trend, suggesting that businesses are actively hiring and workers are in high demand. The labor demand composite score of 7.01 further reinforces this notion, ranking in the top tier at the 88th percentile.

Unemployment

The unemployment rate in the Los Angeles-Long Beach-Anaheim metro area is 5.00%, ranking near the median at the 48th percentile. This rate suggests that the labor market has some slack, making it slightly easier for businesses to hire workers compared to cities with tighter labor markets. However, the unemployment rate is not low enough to indicate a significant surplus of available workers, and businesses may still face some competition for top talent.

Wage Growth

The year-over-year wage growth in the Los Angeles-Long Beach-Anaheim metro area is 3.39%, ranking near the median at the 46th percentile. This moderate wage growth rate suggests that labor costs for employers are rising, but not at an alarming rate. Workers in the area are experiencing an increase in purchasing power, which can have a positive impact on local consumer demand.

Cost of Living

The Los Angeles-Long Beach-Anaheim metro area has a cost of living ranking in the bottom tier at the 4th percentile, with a PSF to earnings ratio of $652/sqft to $41.54/hr, or 15.70. This indicates that the city is relatively expensive compared to its peers, making it challenging for businesses to attract talent without offering wage premiums. The fact that PSF is falling by 2.1% year-over-year provides some relief, but the overall cost of living remains a significant concern.

Labor Force Growth

The civilian labor force in the Los Angeles-Long Beach-Anaheim metro area is contracting at a rate of -2.18% year-over-year, ranking in the bottom tier at the 8th percentile. This decline in labor force supply suggests that businesses may face structural headwinds when trying to hire workers, as the available pool of talent is shrinking.

Building Permits

The Los Angeles-Long Beach-Anaheim metro area has experienced a 17.69% year-over-year increase in residential building permits, ranking above average at the 66th percentile. This expansion in housing supply is a positive sign for future affordability and workforce accommodation, as it may help to alleviate some of the pressure on the local housing market.

Days on Market

The median days on market for homes in the Los Angeles-Long Beach-Anaheim metro area is 53 days, with a year-over-year change of 0.0%. This relatively fast pace of home sales suggests that the market is competitive, making it challenging for relocating workers to find affordable housing options.

Office Economy

The Los Angeles-Long Beach-Anaheim metro area has an office economy ranking near the median at the 44th percentile, with a share of professional and office workers at 2.32 out of 5. This suggests that the city has a moderate depth of professional talent, making it suitable for businesses in the tech, finance, and consulting sectors, but potentially less attractive for those requiring a more specialized or industrial workforce.

The Los Angeles-Long Beach-Anaheim metro area offers businesses a strong labor demand and a growing housing supply, but it also presents significant challenges, particularly in terms of its high cost of living and shrinking labor force. The single biggest risk or constraint for decision-makers is the city's expensive cost of living, which may require businesses to offer wage premiums to attract and retain top talent.