St. Louis has an overall grade of C+ with a composite score ranking it 39.2th percentile out of 50 US metros. The city's current economic character is most defined by its low labor demand, with a composite score of 3.49 ranking it in the 36th percentile, and its slow wage growth, with a year-over-year change of +0.64% ranking it in the 12th percentile. These metrics signal a challenging environment for businesses looking to expand or relocate.

Labor Demand

The employment growth rate in St. Louis is -0.58% year-over-year, and weekly hours are deviating -1.143% from the city's own 12-month baseline. This combination signals a contraction in labor demand, indicating that the city is not adding jobs at a pace that can support growing businesses. The negative hours deviation suggests that even existing workers are seeing reduced hours, rather than an expansion of genuine demand.

Unemployment

The unemployment rate in St. Louis is 4.30%, ranking it in the 36th percentile. This indicates a moderate level of slack in the labor market, making it somewhat easier for businesses to hire compared to tighter markets. However, the practical implication is that businesses may still face some competition for top talent, and wages may not be as depressed as in markets with much higher unemployment.

Wage Growth

The year-over-year wage growth in St. Louis is +0.64%, ranking it in the 12th percentile. This slow wage growth signals a relatively flat cost environment for employers, but it also means that workers have weak bargaining power and limited purchasing power. As a result, businesses may not face significant pressure to increase wages, but they may also struggle to attract and retain top talent.

Cost of Living

St. Louis has a cost of living score ranking it in the 31st percentile, with a PSF of $167/sqft and average hourly earnings of $36.95/hr, resulting in a ratio of 4.52. This indicates that the city is relatively expensive compared to its peers, making it less attractive for talent without wage premiums. The fact that PSF is rising +1.2% year-over-year further exacerbates the affordability challenge.

Labor Force Growth

The civilian labor force in St. Louis is growing at a rate of +0.39% year-over-year, ranking it in the 66th percentile. This positive growth rate indicates that the workforce supply is expanding, which is a positive sign for businesses looking to hire. However, the relatively slow growth rate means that hiring capacity may still be limited, especially for businesses with high labor demands.

Building Permits

The number of building permits in St. Louis is increasing by +9.19% year-over-year, ranking it in the 64th percentile. This signals that housing supply is expanding, which should improve affordability and accommodation for the workforce in the future. As a result, businesses may find it easier to attract and retain talent, especially if they offer relocation assistance or other benefits.

Days on Market

The median days on market in St. Louis is 42 days, with a year-over-year increase of +7.7%, ranking it in the 80th percentile. This indicates a slower market, making it more accessible for workers relocating to the city. However, the rising days on market also suggests that the market may be normalizing, which could lead to more moderate price growth and reduced pressure on affordability.

Office Economy

St. Louis has an office economy score ranking it in the 16th percentile, with a share of professional and office workers indicating a relatively shallow talent pool. This makes the city less suited for businesses that require a deep knowledge-economy talent pool, such as tech, finance, or consulting firms. However, the city may be more attractive for businesses with industrial or logistics-dominated economies.

In conclusion, St. Louis offers businesses a relatively affordable and accessible market, with a moderate level of labor market slack and slow wage growth. However, the city's biggest risk or constraint is its low labor demand and limited talent pool, which may make it challenging for businesses to attract and retain top talent, especially in knowledge-economy sectors. Decision-makers should carefully weigh these factors when considering St. Louis as a location for their business.