January Job Creation Highlights Recovery in Key Commercial Property Types
- Employers tackling labor shortage in new year. The job market continued to recover in the opening month of 2022 as 467,000 jobs were created. While unemployment also rose, the labor force participation rate improved by 30 basis points to 62.2 percent, a post-recession high, as wage increases lured job seekers.
- Recent hiring bolsters long-term outlook for office properties. January’s employment gains included 86,000 new professional and business services-related positions, surpassing the February 2020 total by 511,000 personnel. This expansion bodes well for office buildings long term, even though it is unclear how many employees are currently commuting to workplaces.
- Retailers and hotels gain ground as new year begins. Lodging establishments, bars, restaurants and other stores continued to grow staff last month, adding a combined 212,000 jobs across the leisure, hospitality and retail trade sectors. The hiring underscores the ongoing demand for these services that is also reflected in improving property performance.
- Continued employment growth validates Fed actions. While the unemployment rate ticked up a mild 10 basis points to 4 percent in January, last month’s overall positive employment report only adds further weight behind the Federal Reserve’s tightening monetary policy.
- Omicron’s impact goes beyond job gains. The creation of nearly 1 million new jobs over the past two months indicates that employers were broadly able to navigate the challenges posed by omicron and grow staffs in the winter months.
Sources: Marcus & Millichap Research Services; Bureau of Labor Statistics;
CoStar Group, Inc.; Federal Reserve Bank of St. Louis; STR, Inc.