The Philadelphia-Camden-Wilmington metro area has earned an overall grade of A, ranking in the 63.8th percentile among 50 US metros, with a composite score driven largely by its strong labor demand and labor force growth, which stand at 84th and 88th percentiles, respectively. The city's labor demand composite score of 6.76, combining a +0.83% employment growth rate and a +1.300% weekly hours deviation from its own trend, signals a genuine demand expansion. This, coupled with its labor force growth, defines the city's current economic character.

Labor Demand

The employment growth rate of +0.83% and weekly hours deviation of +1.300% from its own trend indicate a strong labor market with genuine demand expansion. This combination signals that the city is adding jobs and workers are putting in more hours than the trend, suggesting a healthy and growing economy. The labor demand composite score of 6.76 further reinforces this, placing it in the top tier at the 84th percentile.

Unemployment

The unemployment rate of 4.20% places the city above average, at the 72nd percentile, indicating a relatively tight labor market. This tightness means that businesses may face challenges in hiring, as there is less slack in the labor market, potentially leading to upward pressure on wages. However, it also suggests a strong local economy with fewer workers seeking employment.

Wage Growth

With a year-over-year wage growth rate of +2.14%, the city experiences below-average wage increases, ranking at the 26th percentile. This moderate wage growth suggests that labor costs for employers are not rising too rapidly, but it also implies that workers may not see significant increases in their purchasing power. The slower wage growth could be a mixed blessing for businesses, offering a relatively stable cost environment but potentially weaker worker bargaining power.

Cost of Living

The cost of living in Philadelphia, with a PSF of $228/sqft and hourly earnings of $32.59, resulting in a ratio of 7.00, is below average, ranking at the 39th percentile. However, considering the inversion, this means the city is less affordable than its percentile rank might suggest, as a higher percentile score indicates more affordability. The city's affordability, or lack thereof, could impact talent attraction, as higher costs might require wage premiums to attract and retain workers.

Labor Force Growth

The civilian labor force is growing at a rate of +1.42% year-over-year, indicating an expanding workforce supply. This positive growth rate, placing the city in the top tier at the 88th percentile, suggests that the hiring capacity for businesses is strong, with a growing pool of potential workers. This is a significant advantage for companies looking to expand or establish operations in the area.

Building Permits

The year-over-year change in residential building permits is +2.10%, which is near the median, indicating a modest expansion in housing supply. This growth suggests that developer confidence is present, and future housing supply is likely to improve, which could lead to better affordability and easier accommodation for the workforce. However, the near-median performance might not be enough to keep pace with demand, potentially leading to future affordability challenges.

Days on Market

Homes are currently sitting on the market for 48 days, with a year-over-year increase of +9.1%, placing the city in the top tier at the 84th percentile. This longer days on market suggests a slower, more buyer-friendly market, which could make it easier for relocating workers to find housing. The rising DOM in a strong job market indicates a healthy normalization rather than demand erosion.

Office Economy

With an office/professional worker share composite score of 2.86, placing the city at the 60th percentile, Philadelphia has a deep enough professional talent pool to support businesses, particularly those in tech, finance, consulting, and HQ operations. This makes the city well-suited for knowledge-economy businesses but less ideal for industries requiring large industrial or logistics workforces.

The Philadelphia-Camden-Wilmington metro area offers businesses a strong labor market with genuine demand expansion and a growing labor force, making it an attractive location for companies looking to expand. However, the single biggest risk or constraint for decision-makers is the relatively tight labor market and its potential to drive up wages, coupled with the city's below-average affordability, which might necessitate wage premiums to attract talent.