The pace of hiring rebounded in June after a soft May. On average, 2019 has been weaker than 2018 with the average number of jobs created per month down to 172,000 vs. 235,000. Still, the pace of hiring is close to what it was in the first halves of 2016 and 2017 when an average 177,000 and 182,000 new jobs per month were added, respectively.
Non-accelerating wage growth and continued low core inflation will allow the Fed to maintain rate cut flexibility. The strong June headline number does modestly weaken the case for 2019 rate cuts, but the market is strongly expecting a 25-bp cut in July and at least one more rate cut later this year.
Overall, June’s employment report supports CBRE’s view that the U.S. economy remains healthy. Even as average monthly jobs growth cools and risks to the global outlook remain, we expect economic conditions in the U.S. to remain broadly supportive of property market fundamentals during the second half of 2019.