The Seattle-Tacoma-Bellevue metro area has an overall grade of B, ranking at the 52.7th percentile among 50 US metros, with a composite score reflecting a mix of strengths and weaknesses. The city's economic character is most defined by its high wage growth, at 7.21% year-over-year, and its strong building permits growth, at 83.04% year-over-year. These metrics suggest a city with a growing economy and increasing housing supply.
Labor Demand
The employment growth rate in Seattle-Tacoma-Bellevue is 0.04% year-over-year, combined with a 0.263% deviation in weekly hours above the city's own trend. This signals a genuine demand expansion, as hours are running above trend during a period of job growth. The labor demand composite score of 4.62 is near the median, indicating a stable but not exceptionally strong labor market.
Unemployment
The unemployment rate in Seattle-Tacoma-Bellevue is 4.80%, ranking at the 8th percentile, indicating a tight labor market with limited slack. This means that businesses trying to hire in this city may face challenges in finding available workers, leading to potential wage pressure. The low unemployment rate suggests that workers have more bargaining power, making it essential for employers to offer competitive compensation packages.
Wage Growth
The year-over-year wage growth in Seattle-Tacoma-Bellevue is 7.21%, ranking at the 88th percentile, indicating fast and rising labor costs for employers. This strong wage growth is good for worker purchasing power, as employees can afford more goods and services with their increasing earnings. However, it may pose a challenge for businesses looking to keep labor costs under control.
Cost of Living
Seattle-Tacoma-Bellevue has a cost of living score with a PSF of $444/sqft, which is decreasing by 3.5% year-over-year, and an earnings ratio of $47.70/hr, resulting in a ratio of 9.31, ranking at the 46th percentile. This means that the city is near the median in terms of affordability, neither exceptionally expensive nor unusually affordable. The decreasing PSF trend is a positive factor, but the overall affordability score does not provide a significant talent attraction advantage without wage premiums.
Labor Force Growth
The civilian labor force in Seattle-Tacoma-Bellevue is growing at a rate of -0.29% year-over-year, indicating a contracting labor pool. This contraction may pose a structural headwind for hiring, as the supply of available workers is shrinking. Businesses may need to consider strategies to attract workers from other areas or invest in employee retention programs.
Building Permits
The year-over-year change in building permits in Seattle-Tacoma-Bellevue is 83.04%, indicating a significant expansion in housing supply. This growth in permits suggests that the city is experiencing an increase in developer confidence, which may lead to improved affordability and a more accommodating environment for the workforce in the future.
Days on Market
The current median days on market in Seattle-Tacoma-Bellevue is 37 days, with a year-over-year increase of 2.8%. This indicates a relatively competitive market, but not extremely fast-paced. Workers relocating to this city may find it accessible, but not overly slow, allowing for a reasonable amount of time to find a suitable home.
Office Economy
Seattle-Tacoma-Bellevue has an office economy score ranking at the 78th percentile, indicating a deep and specialized talent pool in professional and office sectors. This makes the city well-suited for businesses in the tech, finance, consulting, and HQ sectors, but less ideal for industries with more industrial or logistics-oriented profiles.
The Seattle-Tacoma-Bellevue metro area offers businesses a unique combination of a growing economy, increasing housing supply, and a deep talent pool in professional sectors. However, the single biggest risk or constraint for decision-makers is the tight labor market and resulting wage pressure, which may impact businesses' ability to hire and retain workers without offering competitive compensation packages.