The Sacramento-Roseville-Folsom metro area has an overall grade of C, ranking 35.2th percentile out of 50 US metros, with a composite score reflecting a mix of average labor demand and below-average cost of living and labor force growth. The city's economic character is most defined by its labor demand composite score of 5.29, which is above average at the 70th percentile, and its wage growth rate of +1.22%, which is in the bottom tier at the 16th percentile. These metrics suggest a city with some job growth but limited upward pressure on wages.

Labor Demand

The employment growth rate in Sacramento-Roseville-Folsom is +0.69% year-over-year, combined with a weekly hours deviation of +0.025% from its own 12-month baseline, signaling genuine demand expansion. This combination indicates that the city is adding jobs and workers are putting in more hours than typical, suggesting a growing economy. The labor demand composite score of 5.29 is above average, at the 70th percentile, further supporting this interpretation.

Unemployment

The unemployment rate in Sacramento-Roseville-Folsom is 4.70%, which is below average, ranking at the 34th percentile. This indicates a relatively tight labor market, making it harder for businesses to hire and potentially leading to upward wage pressure. Companies looking to staff up in this city may face challenges finding available workers.

Wage Growth

The year-over-year wage growth rate in Sacramento-Roseville-Folsom is +1.22%, which is in the bottom tier, ranking at the 16th percentile. This slow wage growth suggests a relatively flat cost environment for employers but weak bargaining power for workers. As a result, worker purchasing power may not be increasing significantly.

Cost of Living

Sacramento-Roseville-Folsom has a cost of living score that ranks at the 12th percentile, with a price-to-salary ratio of $344/sqft to $38.23/hr, or 9.00. Although the price per square foot is decreasing by 0.3% year-over-year, the city remains relatively expensive compared to its peers. This could make it challenging to attract talent without offering wage premiums.

Labor Force Growth

The civilian labor force in Sacramento-Roseville-Folsom is shrinking at a rate of -0.59% year-over-year, indicating a contracting labor pool. This decline in labor force supply poses a structural headwind for hiring, as the available workforce is not expanding.

Building Permits

The number of residential building permits in Sacramento-Roseville-Folsom has decreased by 21.43% year-over-year, signaling a tightening housing supply. This sharp decline in permits suggests that future affordability and workforce accommodation may be at risk, potentially exacerbating the challenges of attracting and retaining talent.

Days on Market

The median days on market for homes in Sacramento-Roseville-Folsom is 38 days, with no year-over-year change. This relatively fast pace of home sales indicates a competitive market, which could make it tough for relocating workers to find housing. However, the lack of change in days on market suggests a stable, albeit competitive, environment.

Office Economy

The share of professional and office workers in Sacramento-Roseville-Folsom ranks at the 24th percentile, indicating a relatively shallow talent pool in these sectors. This city is less suited for businesses requiring a deep knowledge-economy talent pool, such as tech, finance, or consulting firms, but may be more appropriate for industries with different workforce needs.

The Sacramento-Roseville-Folsom metro area offers a mix of average labor demand and below-average cost of living and labor force growth, making it a challenging location for businesses seeking to expand or relocate. The single biggest risk or constraint for decision-makers is the city's limited and shrinking labor force, which poses significant challenges for hiring and talent attraction, potentially outweighing any benefits from the city's current economic conditions.