Unemployment & Labor Market
Memphis has an unemployment rate of 4.0%, within the healthy range of 3.5–4.5%. The year-over-year decline of 0.2 percentage points indicates that unemployment is falling, and labor market conditions are improving. This suggests that the city's job market is functioning efficiently, without signs of significant slack or overheating.
Workforce Supply
The civilian labor force in Memphis is expanding at a 1.36% year-over-year rate, a positive trend that reflects a growing pool of available workers. This growth is favorable, as it indicates that more residents are entering or re-entering the labor market, which can support sustained employment growth. A rising labor supply helps mitigate labor shortages and supports long-term economic resilience.
Wage Growth
Average hourly earnings in Memphis have increased by 7.45% year-over-year, a strong rate of wage growth that exceeds typical inflation benchmarks. This rapid increase suggests that employers are competing for workers or responding to tight conditions in certain sectors, allowing workers to gain substantial real purchasing power. Such wage momentum can support robust consumer spending and improved living standards.
Labor Demand
Memphis has a labor demand composite score of 5.44, indicating solid overall demand for workers. However, nonfarm employment is growing at a slow 0.06% year-over-year pace, which contrasts with other positive signals. Nevertheless, weekly hours worked are 1.058% above their 12-month baseline, suggesting that employers are increasing hours before hiring, which may signal cautious but strengthening demand. The mixed employment growth data implies modest near-term job creation despite underlying demand pressures.
Cost of Living
The cost of living composite ratio in Memphis is 0.36, a low value indicating high affordability relative to earnings. This means that residents retain a large share of their income after housing costs, particularly given strong wage growth. Memphis remains an economically accessible city, enhancing its appeal for households and businesses sensitive to cost efficiency.
Office Economy
The office worker ratio composite is 0.48, a very low score that places Memphis near the bottom nationally. This reflects the city's structural reliance on logistics, industrial, and service-sector employment, rather than professional or white-collar industries. The limited presence of high-value office-based firms constrains wage diversification and knowledge-economy development.
Housing — Construction
Residential building permits in Memphis have increased by 19.69% year-over-year, a significant rise that signals strong builder confidence and active construction activity. This robust supply response may help moderate housing price pressures and accommodate population or household growth. The surge in permits suggests that developers view the local housing market as fundamentally sound and profitable.
Housing — Market Velocity
The median days on market for homes in Memphis is 62.0, a figure that has increased by 6.9% compared to the prior year. This rise indicates a softening in buyer demand or a relative increase in supply, pointing to a cooling housing market. Despite strong construction, sales velocity is slowing, which could signal waning momentum in homebuyer activity.
Conclusion
Memphis exhibits a mixed but generally favorable economic picture, characterized by strong wage growth, low unemployment, and high housing affordability. The labor market shows improving conditions, with a growing workforce and rising hours worked, although actual employment growth remains minimal. The city's key strengths include robust construction activity and cost competitiveness, but risks emerge from a cooling housing market and a structurally limited office economy that may hinder long-term productivity growth. The industrial base supports stability, but diversification into higher-value sectors would strengthen the city's economic resilience in the near term.