One Bright Spot From An Otherwise Lackluster Employment Report
Transportation, trade, and utilities made gains in hiring last month.
Last week the Labor Department reported that US employers added 194,000 personnel to payrolls in September, barely above the monthly average from more typical years such as 2018.
However, Marcus & Millichap says there was growth that bodes well for some CRE sectors.
During the month the private sector (a separate measure) created 317,000 jobs with gains particularly in transportation, trade, and utilities.
Those industry niches have already surpassed its pre-pandemic headcount and continue to grow.
“The nation’s logistics infrastructure has only become more important during the health crisis, as made evident by a near-record level of industrial space being absorbed in the second quarter,” Marcus & Millichap stresses.
To fully staff new distribution centers, companies such as Amazon and Walmart have raised their starting salaries which Marcus & Millichap says could draw workers from sectors continuing to lose business due to the pandemic.
That said, there is no understating the effect lackluster hiring will have on the commercial real estate market.
The firm says a number of factors are responsible for the general slowness in hiring.
Despite the re-openings of bars and restaurants some people continue to be wary of dining out, while New York and Los Angeles now require proof of vaccination from patrons, limiting visits.
At the same time, retailers and hospitality providers may be facing greater hiring constraints moving forward due to a national vaccine mandate set to take effect in the coming weeks for large employers.
The workforce is being shrunk, M&M added by individuals opting for early retirement and families relocating to more affordable areas which have allowed some dual-income households to fall back on a single paycheck.
Logistical logjams, infection worries, vaccine mandates, and a decline of 123,000 public sector jobs also contributed to last month’s slowdown, according to the research report.
There is some relief further on the horizon. Last month, Marcus & Millichap predicted labor shortages and wage increases should abate a bit in 2022.