Job Market Strengthens CRE Investment Outlook

Written By Marc Nicholson

How the Labor Market Will Influence CRE Performance​

Federal Reserve Preparing To Lower Interest Rates ​

  • According to Wall Street, the Fed is anticipated to reduce interest rates by 25bps to 30 bps in September ​

  • Downward jobs revision and rising unemployment leading the Fed to place more emphasis on supporting the labor market​

Labor Market Is Cooling, But Not Signaling A Recession ​

  • Rising unemployment reflects the slowdown of a previously-overheated labor market, rather than an economic downturn ​

  • Labor market among middle-aged and college-educated population remains tight ​

  • Despite revision, hiring still on par with pre-pandemic norms ​

Sustained Economic Growth Will Support CRE Space Demand​

  • Future rate cuts will help economy achieve a soft landing​

  • Wages climbing a steady pace, supporting retail sales growth that should flow into demand for retail and industrial spaces ​

  • A healthy level of job growth will fuel household formations, bolstering consumer needs for apartments and self-storage ​

*T-12 through March after BLS 3Q revision; Revision applied to 2024
Sources: Marcus & Millichap Research Services, U.S. Census Bureau​

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Marc Nicholson
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