A Dismal June Employment Report
The commercial real estate industry is a generally optimistic bunch. I think it is just in our nature and part of the required fabric required to be successful in a tough business. Over the last week or so there has been considerable reporting done on how the office market has improved and while it clearly has, we now appear to be entering a lull in the recovery.
There is certainly no way to characterize the June employment report as anything but weak, and the fact that it follows on the heels of an equally soft May report is equally troubling. So pointing to the fact all the growth was in the private sector or a good portion of the jobs was office using employment just doesn’t seem to count for much. The bottom line is that the U.S economy added 43,000 nonfarm jobs over the last 2 months and at that pace the recovery in the office market previously experienced in 4th quarter of last year and the 1st quarter of this year is certain to stall until the employment situation turns back in the other direction.
Given the fact that the office market typically lags shifts in the labor market by 2-3 months, it may very well be the first quarter of 2012 before the office market recovery resumes assuming that the employment situation turns around in the 4th quarter, and after today’s job report that is a big question mark.