Unemployment & Labor Market
Philadelphia's unemployment rate is 4.0%, within the healthy range of 3.5–4.5%. However, the year-over-year increase of 0.6 percentage points indicates a rise in unemployment, suggesting labor market conditions are gradually deteriorating. Although the current rate does not indicate weakness, the upward trend points to moderating job growth or weakening labor demand.
Workforce Supply
The civilian labor force in Philadelphia is growing at a 0.93% year-over-year rate, indicating a modest expansion in the pool of available workers. This growth suggests that more individuals are entering or re-entering the labor market, which can support sustained employment growth if demand keeps pace. The rate is moderate, placing workforce supply growth slightly above average compared to other metros.
Wage Growth
Average hourly earnings in Philadelphia are rising at a 1.91% year-over-year rate, a relatively weak pace of wage growth. This is below the 3–4% threshold typically needed to outpace inflation and improve real purchasing power for workers. Such subdued wage growth may reflect limited labor market tightness or a shift toward lower-paying employment sectors.
Labor Demand
Labor demand in Philadelphia is strong, as indicated by a high Labor Demand Composite score of 6.77 and a 90th percentile ranking. Nonfarm payroll employment is growing at a 1.16% year-over-year rate, which is moderate, while weekly hours worked are 0.844% above the 12-month baseline, signaling increasing demand for labor. These metrics suggest employers are relying on existing staff for more hours, although hiring momentum has not reached high-growth levels.
Cost of Living
Philadelphia's cost of living composite score is 3.0, indicating moderate affordability relative to local earnings. Housing and living expenses are reasonably aligned with income levels, supporting household purchasing power, particularly compared to higher-cost coastal metropolitan areas.
Office Economy
The Office Worker Ratio composite score of 3.52 is high, ranking in the 84th percentile, indicating a significant concentration of white-collar and professional services employment. This reflects Philadelphia's economic structure as a hub for finance, education, healthcare, and corporate services. A strong office sector supports downtown vitality and higher-wage job creation, although it may be sensitive to remote work trends.
Housing — Construction
Residential building permits are up 4.14% year-over-year, reflecting steady growth in construction activity and builder confidence. This level of supply response is positive, suggesting developers are responding to demand without overbuilding. The pace supports gradual inventory expansion, which can help moderate housing cost pressures over time.
Housing — Market Velocity
Homes in Philadelphia are taking a median of 43.0 days to sell, with a 10.26% year-over-year increase in days on market, indicating homes are taking longer to sell than last year. This suggests a softening in buyer demand or a relative oversupply, with the market cooling rather than tightening. Despite a composite score of 8.03 suggesting relatively strong market velocity, the recent trend points to deceleration.
Conclusion
Philadelphia's economy is performing at an average level, with a balanced mix of strengths and vulnerabilities. The labor market shows healthy unemployment but rising joblessness and weak wage growth, offset by strong labor demand signals and a robust professional services sector. Construction activity is expanding steadily, and the cost of living remains manageable, supporting household stability. However, slowing home sales and tepid earnings growth pose risks to consumer confidence and housing market resilience. The near-term outlook is one of moderate expansion, contingent on sustained demand in white-collar sectors and broader wage recovery.