Research & Analytics

Executive Summary

The U.S. added 661,000 jobs in September vs. a consensus expectation of 800,000.
The unemployment rate declined more than expected, falling by 50 basis points (bps) to 7.9%. This reflected a 30-bp decrease in the labor participation rate to 61.4%.
Retail-oriented jobs saw the greatest gains this month, including traditional retail and food & beverage categories.
The economic recovery remains on track but is slowing, with month-over-month job growth less than half of what it was in August. This is putting pressure on the federal government for an additional stimulus package.
CBRE expects the economic rebound to continue, with lagging recovery of property markets, particularly office, retail and hotels.

Commercial Real Estate Highlights

Office: Employment in office-using sectors increased by 126,000 jobs in September. Professional & business services increased by 89,000 and financial activities by 37,000. The office market's recovery will trail that of the economy until there is a medical resolution of the COVID-19 crisis. Analysts believe this will come in H1 2021 and would allow occupiers to confidently assess their space needs as offices fully reopen.
Industrial: Warehousing & storage jobs increased by 32,200 in September, while manufacturing gained 66,000. Job growth in these sectors, combined with the structural increase in e commerce sales, underpins a positive outlook for industrial real estate demand.
Retail: Solid job gains occurred across retail sectors in September. Food services & drinking places gained 200,300 jobs. The broader retail sector gained 142,400. While the retail sector is showing encouraging signs of recovery, retail real estate demand is expected to remain subdued over the short term.
Construction: The construction industry gained 26,000 jobs in September and has been supported by ultra-low interest rates. Residential construction has been particularly strong with associated gains in specialty contractors.
Health Care: Health care added 52,800 jobs in September. Hospitals saw a small decrease in payrolls, down 6,400 for the month, while nursing and residential care facilities had a modest gain of 1,600 jobs. Ambulatory health care services, which include doctors' offices, outpatient care, laboratories and home health, gained 57,600 jobs.
Multifamily: Continued job gains support household formation and rent collections, but additional federal aid will be key to the pace of multifamily's recovery during the coming months. Federal efforts to halt evictions, coupled with expiration of enhanced unemployment benefits, will pressure the multifamily sector over the near term. Longer term, analysts expect the recovery will be outpaced only by the industrial sector.