Employment Market and the FED
WHAT DO NEW LABOR MARKET TRENDS MEAN FOR CRE INVESTORS?
Labor Markets Strength Continues Despite Elevated Rates
Warehousing employment has skyrocketed since 2019, growing over 35% from the prior peak and aiding industrial absorption
Professional and Business Services job totals have also exceeded prior peaks, helping office absorption return to positive territory at the close of 2023
Economic Growth Both a Headwind and Tailwind for CRE
Strong employment growth is bolstering economic activity and boosting space demand across asset type
At the same time, a strong labor market may cause the Fed to be more cautious when cutting rates throughout the year
Inflation Headed Towards Federal Reserve Target of 2%
Inflation is on the downward trajectory, and is below the Fed target level when looking at 3-month and 6-month annualized rates
If the Fed can get inflation under control while labor markets continue to grow, the central bank is unlikely to cuts rate quickly
*Sources: Marcus & Millichap Research Services, BLS
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