January’s addition of 225,000 jobs was well above expectations. Wage growth remained healthy at 3.1% but was not enough to change inflation expectations or limit Fed policy moves. Growth was positive across most sectors, but the picture was somewhat mixed. There was notable weakness in manufacturing as the impact of trade tensions and continued problems with Boeing’s 737 MAX aircraft weighed on the sector.
CBRE expects healthy economic growth of 2% in 2020. As trade tensions ebb and U.S. consumers remain well-positioned, there is upside potential for growth. Nevertheless, January’s jobs report will not constrain the Fed’s ability to respond if economic conditions deteriorate or if large exogenous shocks occur, such as a worse-than-anticipated spread of coronavirus. With strong commercial property market fundamentals, January’s employment report reinforces CBRE’s view that 2020 will be a good year for real estate.