The latest jobs report from the Bureau of Labor Statistics showed 223,000 jobs added in April and an unemployment rate of 5.4 percent — a much better piece of news than March’s employment situation report (revised downward from 126,000 jobs to 85,000 jobs).
The solid April numbers should be comforting for real estate investors, establishing that March’s weak numbers (following on 266,000 jobs added in February) are likely the result of bad winter weather and not a change in the upward employment trend.
The sectors with the most job gains were professional and business services (62,000 jobs), healthcare (45,000 jobs), and construction (45,000 jobs). With many markets at new employment peaks — especially markets with strong exposure to high-tech and healthcare — new commercial real estate development is going to be needed, though rents will have to rise to levels to support that new construction.
A round-up of economists’ reactions to the jobs numbers shows a positive reaction to the totals, along with expectations that this will smooth the way for a hike in interest rates later in the year.
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Loretta Clodfelter is editor of The Institutional Real Estate Letter – Americas.
