If you are a regular reader of this StreetWise column, you knowthe importance that I believe the employment picture has on ourcommercial real estate markets. In fact, there is no other metricthat more profoundly impacts the fundamentals of both residentialand commercial real estate.

This is why last Friday’s jobs report was particularlytroubling. In June, U.S. payrolls lost 125,000 jobs, the firstmonthly loss of 2010. These losses were due, mainly, to theelimination of 225,000 temporary government census workers. Just as441,000 new census temporary jobs skewed the numbers higher monthsago (and the administration seemed downright giddy over this “jobgrowth”), June’s job eliminations have skewed the numbers to thedownside.

The official unemployment rate, interestingly, dropped from 9.7percent in May to 9.5 percent even though the market lost 125,000jobs. You may ask how this can happen as elementary schoolmathematics would indicate this is an impossibility. The fact isthat something called the “participation rate” impacts the officialunemployment rate calculation. While the market lost 125,000 jobs,simultaneously, 652,000 discouraged Americans stopped looking forwork. After their job search has ceased for more than 30 days,these unemployed workers are no longer technically consideredunemployed. This quirk in the official rate calculation caused thereduction seen in June.

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