NEW YORK CITY—Winter may be over in more ways than one, in theview of Cushman & Wakefield's KenMcCarthy. Given April's strong national jobsreport from the US Bureau of Labor Statistics, it appearsthat “the underlying strength of the economy is finally starting toemerge,” McCarthy writes in a report issued this past Friday.

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“For the first three months of 2014, we had beenexpecting the economy to shift into a higher gear led by a surge inhiring as businesses begin to take more risk to generate top-linegrowth,” writes McCarthy, C&W's senior managing director,economic analysis and forecasting. That shift evidently is takingplace: April's tally added 288,000 jobs to the domestic economy,bringing unemployment down from 6.7% to 6.3% inthe largest single-month decline in the jobless rate since1949.

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It was accompanied by upward revisions in thenumbers for February and March, to 222,000 and 203,000,respectively. “You may recall that February job growth was firstestimated at 175,000, so the growth in February has been revised upby more than 25%.,” McCarthy notes.

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A drilldown into employment growth by sectorsuggests both positive and less-positive implications forcommercial real estate. Noting that growth last month was“widespread across the economy,” McCarthy reports that the threemain office-using sectors—namely, financialservices, professional and business services andinformation—increased by “an aggregate of 78,000 jobs, to a newrecord high.”

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The construction sector added32,000 jobs last month. That figure brought the unemployment ratein construction to the lowest April level in seven years and liftedindustry employment to 6.0 million, its highest level since June2009, according to the Associated General Contractors ofAmerica.

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“It is heartening that all categories ofconstruction employers added workers, not only in April but overthe past 12 months,” says Ken Simonson, chiefeconomist at AGC in Arlington, VA. “Moreover, contractors have beenadding to workers' hours as well as hiring more employees.”However, Simonson and other AGC officials point to a lack oftraining programs for future construction workers as a near-termliability for the sector.

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Along with health and education, which added40,000 positions, another big gainer in jobs was retail with 34,500jobs. However, McCarthy notes that retail, as well asfoodservice—where 32,600 jobs were added to the economy lastmonth—traditionally is lower-paying.

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“This may explain why, despite the drop in theunemployment rate, wage growth was nonexistent,” he writes.“Average hourly earnings in April were unchanged from March.”Nonetheless, McCarthy adds, “with more people working, total incomein the economy is rising, which should lead to stronger growth inconsumer spending in the months ahead.”

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With the jobs recovery from the 2008-2009recession nearly complete, McCarthy writes, “the economy is finallyready to attain new record employment levels.” For commercial realestate, he writes, the implications are “very positive.” The numberof jobs in key office-using sectors continue to rise at a healthypace, “increasing the likelihood of strong absorption in thequarters ahead.”

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Industrial, too, stands to gain from the month's jobs report,with solid numbers in manufacturing (up 12,000) andtransportation and warehousing (up 11,300), “indicating that aseconomic growth picks up in the second quarter, so will activity inthe manufacturing and distribution sectors,” writes McCarthy. “Andfor both retail and multifamily, stronger employment growth willboost incomes and lead to more spending and more demand forapartments.” All in all, McCarthy sums up, April's jobs report was“the first of what we expect will be many showing stronger growthin the months and quarters ahead.”

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Paul Bubny

Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.