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If you are a frequent reader of StreetWise, you know that I am always following trends in unemployment, and for good reason. There is no other metric that more profoundly affects the fundamentals of our real estate markets.If someone has lost a job or believes they may be losing a job, they will typically not move into a larger rental apartment or decide to move from a rental unit into a newly purchased condo or single family residence. If employers are reducing the size of their staff, they no longer need the same amount of office space. These people watch their spending and tend to travel less. The effects on retail sales and hotel performance are obvious.The news on the unemployment front of late has not been positive. The Bureau of Labor Statistics currently pegs the unemployment rate at 9.8% meaning that approximately 8 million jobs have been lost during this downturn. This rate has more than doubled from 4.8% just 19 months ago.  The cumulative job losses over the past 9 months have been far greater than during any other 9 month period since World War II, including the military demobilization after the war.The job losses now exceed the net jobs gained over the previous nine years, making this the only recession to wipe out all job growth from the previous expansion since the Great Depression. Private sector payrolls today are lower than they were at the end of 1999.The stress in the job market appears to be understated by the BLS as the calculation of unemployment was modified during the Clinton administration to make the numbers appear more benign. Nearly 2 million people are unemployed but have given up the search for work. If they have not been actively looking for a job within the 4 weeks preceeding the latest survey, they are no longer counted as unemployed.Part time workers who would prefer to be employed on a full-time basis are also no longer counted among the unemployed. The number of these “underemployed” workers has more than doubled in this recession to over 9 million, representing about 6% of the workforce.If we add those who have given up the search for a job and the underemployed to the government’s estimate of 9.8%, the unemployment rate jumps to over 17%. And even this does not tell the entire story.Nearly every day we read about additional companies that are asking employees to take unpaid leave or furloughs. They are not counted among the unemployed. The average work week for rank-and-file employees in the private sector, which makes up about 80% of the workforce,  has been reduced to less than 33 hours. This is nearly an hour less than it was before the recession began and the lowest level it has been at since the government started tracking this data in 1964.The average length of unemployment has now reached 26.7 weeks, the longest time period since this data has been tracked going back over 60 years.These statistics do not bode well for the administration’s stimulus plan which was implemented initially to create 4 million new jobs. After the $787 billion package was passed and it became clear that there was nothing in the plan which would induce job creation anywhere near this magnitude, the goal was changed to 4 million jobs ”created or saved”. We all know it is nearly impossible to prove what jobs were saved.When will these jobs return? Not only do we need to replace the 8 million lost jobs but our economy needs an additional 100,000 jobs per month to keep up with population growth. Even if job growth returns to the rapid pace of the 1990s, during which we were adding 2.5 million public sector jobs per year (double the 2001-2007 pace), the U.S. wouldn’t get back to a 5% unemployment rate until late in 2017. Other estimates are more bullish putting the estimated date at 2014. An estimate which is troubling for the commercial real estate market is that unemployment is expected to remain above 8% through 2012.Many economists have stated that the economy recently entered recovery mode. It is important to note, however, that without jobs, you don’t have a genuine recovery. Consumer spending is the economy’s main driver and without job growth and pay raises, consumer spending will not revive substantially. This is particularly true because alternative sources of spending power, including home equity and credit cards, are largely tapped out.During the last recession, in 2001, the number of jobless people reached a little more than double the number of full time job openings. By the beginning of this year, job seekers outnumbered jobs four-to-one and, today, the ratio has reached six-to-one.As the economy gets tangibly healthier, there is a fear that employers will continue to make strides wringing more production out of fewer workers. Even as demand picks up, they may be able to hold off on hiring.There is some hope that the job market may rebound more quickly. One thing different about this recession is that so many of the job losses have been at service related companies that have come to dominate U.S. employment. Since the recession began, 3.3 million service sector jobs have been lost, a 2.9% decline which is the largest recorded since 1939. In comparision, the previous two recessions each saw service sector jobs fall by only 0.5%. Service related firms may have a more pressing need than manufacturers to rehire workers as demand comes back.A key question remains: How bad do things have to get before the Obama administration and Congress make job creation a priority? The speed with which the health of our commercial real estate market returns may just depend on the answer to that question.Mr. Knakal is the Chairman and Founding Partner of Massey Knakal Realty Services in New York City and has brokered the sale of over 1,000 properties in his career.

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