The Los Angeles-Long Beach-Anaheim metro area has an overall grade of B, ranking 54.2th percentile out of 50 US metros, with a composite score driven largely by its above-average labor demand and office economy. The city's labor demand composite score of 5.46, which combines a 1.83% employment growth rate and a -1.401% weekly hours deviation, signals genuine demand expansion. Additionally, the office economy's 72nd percentile rank highlights the city's deep professional talent pool.
Labor Demand
The employment growth rate of 1.83% and weekly hours deviation of -1.401% indicate that the city is experiencing genuine demand expansion, with jobs being added and hours running slightly below trend. This combination suggests that the labor market is growing, but not at an unsustainable pace. The labor demand composite score of 5.46 is above average, ranking 74th percentile.
Unemployment
The unemployment rate of 4.80% is below average, ranking 36th percentile, indicating a relatively tight labor market. This means that businesses may face challenges in hiring, as the pool of available workers is smaller, and may need to offer competitive wages to attract talent. The tight market also implies upward pressure on wages.
Wage Growth
The year-over-year wage growth rate of 5.19% is above average, ranking 68th percentile, indicating fast wage growth. This rapid growth suggests that labor costs for employers are rising, but worker purchasing power is also increasing. As a result, businesses may need to factor in higher labor costs when operating in this city.
Cost of Living
The cost of living in Los Angeles-Long Beach-Anaheim is relatively expensive, with a percentile rank of 4th, due to a PSF of $667/sqft and average hourly earnings of $41.74/hr, resulting in a ratio of 15.98. However, the PSF is falling by 3.3% year-over-year, which slightly mitigates the expense. The low affordability score means that businesses may need to offer wage premiums to attract talent, as the high cost of living may deter some workers.
Labor Force Growth
The civilian labor force is contracting at a rate of -0.54% year-over-year, ranking 32nd percentile, indicating a shrinking labor pool. This decline in labor force growth may pose a structural headwind for hiring, as the supply of available workers is decreasing. Businesses may need to adapt their hiring strategies to accommodate this shrinking labor pool.
Building Permits
The year-over-year change in building permits is 112.64%, ranking 96th percentile, indicating a significant expansion in housing supply. This rapid growth in permits suggests that developer confidence is high, and future housing supply is likely to increase, which may improve affordability and accommodate a growing workforce.
Days on Market
The current median days on market is 46 days, with a year-over-year increase of 4.5%, ranking 58th percentile. This relatively moderate pace of home sales means that the market is neither extremely competitive nor extremely accessible for relocating workers. The rising days on market may indicate a healthy normalization of the housing market.
Office Economy
The office economy in Los Angeles-Long Beach-Anaheim is deep, with a percentile rank of 72nd, indicating a strong presence of professional and office sectors. This makes the city well-suited for businesses in the tech, finance, consulting, and HQ sectors, but less suitable for industrial or logistics-dominant businesses.
The Los Angeles-Long Beach-Anaheim metro area offers businesses a unique combination of above-average labor demand and a deep professional talent pool, making it an attractive location for certain industries. However, the city's relatively high cost of living and shrinking labor force growth pose significant risks and constraints that decision-makers should carefully consider when evaluating this location.