February 1, 2019

Executive Summary

  • 304,000 jobs were created in January, far surpassing expectations.
  • The unemployment rate ticked up by 10 basis points (bps) to 4.0% and the labor force participation rate edged up to 63.2%.
  • Average hourly earnings were up by just three cents or 0.1% in January, but up by 3.2% year-over-year.
  • January’s report marks 100 consecutive months of job growth, the longest stretch in U.S. history.

Commercial Real Estate Highlights

  • Retail: Despite recent store-closure announcements, retail employment continues to grow with 20,800 jobs created in January, bringing the monthly average since November to 13,800—a good sign for retail property owners. 
  • Office: The professional & business services and the financial activities sectors added a combined 43,000 jobs in January, bringing the monthly average since November to 37,000.
  • Health Care: Growth in this sector remains encouraging, with 41,600 jobs created in January lifting the monthly average to 41,500 since November.
  • Construction: With 52,000 jobs added in January for an average of 28,300 over the past three months, wage pressures in this sector will remain and likely affect CRE project costs.
  • Industrial: Warehousing & storage added 15,100 jobs in January for a monthly average of 5,400 over the past three months. Manufacturing added 13,000 jobs, bringing the monthly average to 20,000 since November.
  • Multifamily: Strong job growth and continuing wage gains will support household formation and overall rental demand.


While January’s job growth was robust, there were some effects of the longest partial federal government shutdown in history with an uptick in the unemployment rate and in the number of involuntary part-time workers. Though not related to the shutdown, revisions to the November and December job reports yielded 70,000 fewer jobs.

On a macro level, the fact that wage growth remains healthy but is not accelerating—thanks in part to more people entering the workforce—will continue to give the Fed some flexibility in its policy stance. Overall, January’s employment report is very positive for commercial real estate with broad-based job growth supporting demand.

CBRE’s view is that although this is a strong report, the U.S. economy will not be immune to negative effects of slower economic growth overseas and potential policy errors (trade policy, monetary policy, government shutdowns, increased debt ceilings, etc.). Job growth is expected to moderate in the coming months but will remain supportive of property market fundamentals.

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