Los Angeles Economy: Cost of Living, Jobs, and Industries

The Los Angeles metro area — formally Los Angeles-Long Beach-Anaheim — is the second-largest metro economy in the United States. It is the global center of film, television, and music, the busiest container-port complex in the country, and home to one of the most diverse industrial bases of any U.S. metro. The LA economy looks different from New York's: less finance, more entertainment, trade, aerospace, and manufacturing.

This is a plain-English tour of how the LA metro economy works. For the state-level picture, see California Economy. For the country-level view, see The State of the U.S. Economy and the broader Economy hub and city cluster.

How big is the LA metro economy?

For example, recent metro GDP for Los Angeles-Long Beach-Anaheim has run around $1.2 trillion, according to the Bureau of Economic Analysis. Metro population is roughly 12.8 million, per the U.S. Census Bureau. That makes the LA metro larger by population than 45 of the 50 U.S. states.

The biggest industries

LA's economy is unusually broad, but a few sectors carry an outsized share:

• Entertainment — Hollywood is the global center of film, television, music, and increasingly streaming. Studios, talent agencies, and post-production firms cluster across the metro.
• Trade and logistics — the ports of Los Angeles and Long Beach together form the largest container-handling complex in the U.S., moving a huge share of goods imported from Asia.
• Aerospace and defense — Southern California has been a center of aerospace since World War II, and SpaceX, Northrop Grumman, and others maintain large operations here.
• Tourism — beaches, theme parks, and a year-round event calendar drive a major travel and hospitality sector.
• Healthcare — Cedars-Sinai, Kaiser Permanente, UCLA Health, and others employ huge numbers of workers across the metro.
• Manufacturing — apparel, food, and specialty industrial production are still major employers, more so than in most other coastal metros.
• Tech — Silicon Beach (Santa Monica, Venice, Playa Vista, Culver City) hosts a meaningful cluster of software, ad-tech, and gaming companies.

Jobs and wages

Metro labor data is published by the Bureau of Labor Statistics West region. For example, the LA metro unemployment rate has typically run a little above the national average, partly because of the size of its film, tourism, and apparel workforces, all of which are seasonal or project-based.

The City of Los Angeles, Long Beach, West Hollywood, Pasadena, and other cities in the metro set their own local minimum wages above California's statewide minimum. Specific industries — fast food and healthcare, for example — have their own state-set higher minimums. The latest rates are published by the California Department of Industrial Relations.

Cost of living

LA is one of the most expensive metros in the country, especially for housing. For example, recent HUD Fair Market Rent for a two-bedroom in the metro has run around $2,400 a month, with the Westside and beach cities far higher and parts of the San Fernando Valley and Long Beach noticeably lower. Current county-level numbers are at HUD User.

The federal government tracks region-specific inflation data through the BLS West region. LA's CPI tends to run close to the national average month to month, but the level of prices — what things actually cost — is among the highest in the country.

Taxes in LA

LA residents pay California's progressive state income tax, with the highest top rate in the country. Combined sales tax in the City of LA is 9.5%, made up of the state's 7.25% base plus county and city additions. Specific municipalities in the metro set slightly different combined rates. Property taxes are governed by the state's Proposition 13 system, which caps how fast assessed value can grow once a property changes hands.

How the LA metro fits into the national picture

LA is the U.S. gateway to the Pacific Rim. A huge share of goods imported from Asia enter the country through the ports of LA and Long Beach and then move by rail or truck to the rest of the country. That makes LA's economy unusually sensitive to global shipping costs, port labor talks, and changes in trade policy with countries like China and Japan. The federal export side of that story is at the International Trade Administration.

Entertainment and the rest of the economy

When the entertainment industry has a strong year — lots of new film and TV production, healthy ticket and streaming revenue — it spills out into restaurants, hotels, equipment rental, and dozens of related professional services. When production slows because of a strike or a budget cut at the major studios, the same chain reaction works in reverse. That is part of why LA's monthly employment numbers can swing more than the national average.

A note on the numbers

Numbers in this article change every quarter — always check the latest from BEA, BLS, and HUD User for the most current data on the Los Angeles metro.