Implications of a Softening Labor Market for CRE
What’s The Latest Labor Market Data Means For CRE Investors?
Data Release Shows Sharp Pullback in Job Openings
February’s JOLTS report shows that the number of open positions fell below 10 million for the first time in 2 years
Hiring remained steady, suggesting some firms closed open listing without filling the roles, bringing the ongoing labor shortage to its lowest level since September 2021
Cracks in The Labor Market Starting to Form
The unemployment rate has held around 3.5%, but a substantial 1.3 million fewer job openings existed after the first 2 months of 2023
This is the most significant sign of stress on labor markets since the Fed started raising rates last year and will help control wage growth, a major focus of The Fed
Labor Market Stress Could Help Deter a Fed Rate Hike in May
This shift in the labor market could be enough to convince The Fed to pause rate increases at the May meeting, but further hikes present heightened recession risk
If the Fed Funds Rate stays flat, CRE lenders and investors will have time to lock in lending rates and strategies, facilitating heightened deal flow
*Through February
Sources: Marcus & Millichap Research Services, BLS
