CBRE EA Blog: Deconstructing CRE

  • October jobs report: Strong report; higher wages are here

    Nov 4, 2018, 20:30 PM by Richard Barkham
    The U.S. economy added 250,000 jobs in October—well above the consensus estimate of 200,000. Unemployment remained unchanged at 3.7%—the lowest since 1969—while labor force participation increased by 20 basis points (bps) to 62.9%. Average hourly earnings rose by 5 cents in October and are up by 3.1% over the year. Despite recent stock market volatility and potential employment impacts from Hurricane Florence, the October jobs report showed solid gains across all sectors of the economy, and wage growth for the year is at post-financial crisis highs. The 10-year Treasury yield is up nearly 60 basis points (bps) for the year. The 10-year breakeven inflation rate—a measure of markets’ expectations for inflation 10 years from now—has remained consistently above 2%, the Federal Reserve’s stated goal for inflation...
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  • September jobs report: Hiring and wages cool; unemployment at 49-year low

    Oct 5, 2018, 15:36 PM by Richard Barkham
    The U.S. economy added 134,000 jobs in September—far fewer than the 185,000 expected. This was the slowest growth in a year. Unemployment declined to 3.7% while labor force participation was unchanged at 62.7%. Revisions raised the new jobs tally for July and August by 87,000. Average hourly earnings were up 2.8% year-over-year, slowing slightly from August.

    Although Hurricane Florence (unsurprisingly) dampened September hiring, hiring activity will likely slow somewhat from its relatively strong run in H1 2018. The Fed's hiking the 10-year this week was largely due to strong hiring activity in the private sector...
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  • August jobs report: Job gains & wage growth top expectations

    Sep 7, 2018, 14:11 PM by Nikhil Mohan
    The U.S. economy added 201,000 jobs in August, beating market expectations. Unemployment remained at 3.9%, while labor force participation fell slightly, to 62.7%. Revisions lowered the new jobs tally for June and July by 50,000. Having averaged 207,000 new jobs monthly, this year likely will be the strongest for employment since 2015. Year-over-year wage growth was 2.9%—a sign that wages might finally rise higher after years of sluggish gains. Financial markets' mild reaction today suggests that they will wait to see whether wage growth continues its upward trend in the coming months...
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  • July jobs report: Moderate growth shows economy remains on solid footing

    Aug 3, 2018, 14:15 PM by Tim Savage
    U.S. employment rose by 157,000 jobs in July—short of both the consensus expectation for 190,000 and the past year's average monthly gain of 203,000. Excluding losses from the Toys R Us bankruptcy, the figure was very close to target. Unemployment fell slightly to 3.9%, while labor force participation went unchanged at 62.9%. Average hourly earnings rose by 7 cents month-over-month, and wages were up 2.7% year-over-year. Substantial revisions to May and June jobs numbers resulted in a net gain of 59,000 jobs. The past year has seen employment grow by nearly 2.4 million jobs...
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  • June jobs report: Growth beats expectations

    Jul 6, 2018, 13:21 PM by Tim Savage
    June’s jobs report signals that the U.S. economy remains on solid footing, despite geopolitical and trade tensions. Other recent signs of strength include solid personal income and spending data. Jobs gains in retail, construction and manufacturing suggest that the economy continues to expand, showing late-cycle strength. While wage growth also beat expectations in June, it remains well below its historic trend.

    While financial markets have demonstrated some volatility over trade tensions, the 10-year U.S. Treasury yield is largely unchanged since February, and is nearly 25 bps below its May peak...
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  • May jobs report: Strong jobs gains across industries, with modest wage growth

    Jun 1, 2018, 14:30 PM by Nikhil Mohan
    May’s jobs report might signal that the U.S. economy, after modest growth in Q1, is back on the move despite geopolitical and trade tensions. Outsized gains in retail, construction and manufacturing suggest an economy that is firing on all cylinders. Although wage growth also beat expectations in May, at 2.7% year over year, it remains well below historic trends.

    Financial markets have been jittery lately over trade tensions and political unrest in Italy; the 10-year Treasury yield dipped below 2.8% on May 29. Stronger jobs numbers have pushed the yield back above 2.9%, however, and the dollar index has gained 0.2% as of today...
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  • April Jobs Report: Unemployment Lowest Since 2000; Slow Wage Inflation Cools Bond Market

    May 4, 2018, 12:55 PM by Nikhil Mohan
    Monthly jobs reports continue to offer a mixed picture of the economy. April's job gains were lower than expected, while unemployment fell due to 236,000 leaving the workforce. Wage growth continued to puzzle, slowing despite the shrinking labor pool. Although low jobs numbers and slower wage growth might suggest slowing economic growth, lower employment gains might indicate that the labor market is reaching its limit, making an acceleration in wages imminent. The underemployment rate will be a key metric in the coming months; the still-high rate is often seen as a sign that the labor market has yet to reach capacity, explaining why wages haven’t increased significantly...
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  • March Jobs Report: Employment Growth Slows; Wage Growth Rises

    Apr 6, 2018, 14:30 PM by Nikhil Mohan
    Monthly job growth has averaged a relatively strong 202,000 for the past three months, but remains volatile, as do revisions. Average hourly earnings rose slightly in March. Wages have risen by 2.7% this year. In these results, there is no reason to think the Fed might change course in its normalization of monetary policy. Markets have already priced in two additional rate increases this year. The Fed could consider a third increase if wage growth remains above 2.5%, given uneven productivity growth.
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  • February Jobs Report: Employment growth surprises to the upside, wage growth does not

    Mar 9, 2018, 13:52 PM by Nikhil Mohan
    Employment gains continued to surprise to the upside in February. Meanwhile, wage growth slowed slightly—after the strong January increase that led investors to believe higher wage growth might be imminent. February’s report may quell some of that concern. Hiring increases were broad-based and robust in the construction, retail trade, manufacturing, professional & business services, financial activities, health care and mining sectors.
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  • January Jobs Report: Strong hiring leads to greater wage growth

    Feb 2, 2018, 11:50 AM by Nikhil Mohan
    The economy started off 2018 on a strong note, with employment gains surprising on the upside. Job growth has slowed in the past two years but remains solid. A tighter labor market may finally be translating into greater pay increases for workers—wages saw their largest increase since 2009 in January. Hiring was broad-based and robust in the construction, manufacturing, food services and health care sectors, with employment continuing to trend upward.
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  • December Jobs Report: Employment growth cools as wages rise modestly

    Jan 5, 2018, 15:06 PM by Nikhil Mohan
    December saw 148,000 jobs added—less than the consensus expectation for 190,000. Hiring was broad-based, although retail jobs decreased by 20,300 despite reports of a strong holiday shopping season.
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  • Jobs bounce back as hurricane impact fades

    Nov 3, 2017, 12:20 PM by Jeff Havsy
    October saw 261,000 jobs added, and September's decline has been revised to an 18,000-job gain, re-establishing the longest streak of monthly job gains since the series was begun in 1939. Although October's gain came in below consensus, the solid growth and upward revisions show the hurricanes' impact on employment to have been less severe than was thought in September.
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  • Hurricanes contribute to decline in September employment

    Oct 6, 2017, 14:41 PM by Jeff Havsy
    U.S. employment fell by 33,000 jobs in September—the first monthly loss since September 2010—ending the longest streak of monthly job gains on record. The loss was partially attributed to last month's two major hurricanes. With downward revisions to July and August, the rolling three-month average is now 91,000 jobs, down from 185,000 last month. On a positive note, wage growth improved significantly, unemployment fell from 4.4% to 4.2%, and the labor force participation rate rose from 62.9% to 63.1%.
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  • The U.S. political outlook and what it means for real estate

    Sep 26, 2017, 09:50 AM by Jeff Havsy
    At our conference this month in D.C., Ken Simonson of AGC and Jamie Woodwell from MBA shared their distinct perspectives on which policy issues were potentially most consequential for real estate. Tax reform and immigration were discussed in depth.
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  • August jobs report falls short of expectations

    Sep 1, 2017, 13:18 PM by Jeff Havsy
    U.S. employers added 156,000 jobs in August, which was below the consensus forecast for 180,000. Over the past three months, job gains have averaged 185,000—10,000 fewer than last month’s rolling average. This is a healthy pace and the economy remains in good shape, but job growth is starting to slow slightly: 2017 has averaged 176,000 new jobs monthly, down from 2016's 187,000. Surprisingly, wage growth has not accelerated, despite the tight labor market. August's 2.5% wage growth maintained the pace we've seen for most of the past year.
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  • July jobs report beats expectations

    Aug 4, 2017, 13:24 PM by Jeff Havsy
    U.S. employers added 209,000 jobs in July, which was above the consensus forecast of 180,000 jobs. Over the past three months, job gains have averaged 195,000. This is a healthy pace and the economy remains in good shape, but job growth may be slowing slightly: 2017 has averaged 184,000 new jobs monthly, down from 2016's 187,000. Surprisingly, wage growth has not accelerated, despite the tight labor market. July's 2.5% wage growth maintained the pace we've seen for most of the past year.
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  • June jobs report beats expectations

    Jul 7, 2017, 14:28 PM by Jeff Havsy
    U.S. employers added 222,000 jobs in June, which was above the consensus forecast of 170,000 jobs. Monthly job gains have averaged 194,000 over the past three months. The current unemployment rate is low, but there is no clear trend in overall job generation. Certain sectors, such as health care, continue to see growth. Other sectors, such as construction, manufacturing and transportation, remain flat.
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  • April jobs growth beats forecast

    May 5, 2017, 13:36 PM by Jeff Havsy
    After a lull in March, employment growth rebounded in April. The rolling three-month average was virtually unchanged at 174,000 jobs per month and the average for the past 12 months is 186,000—so employers have not materially changed their hiring patterns. Notwithstanding the change in business and consumer sentiment since Donald Trump’s election, economic data in 2017 remain very similar to those at the end of the Obama administration.
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  • Employment Situation: January 2017

    Feb 3, 2017, 12:10 PM by Jeff Havsy
    Our outlook is unchanged after a good, but not great, report to kick off 2017.
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  • Employment Situation, December 2016

    Jan 6, 2017, 13:54 PM by Jeff Havsy
    Today's December employment report had a relatively low headline number, but also a lot of positive data behind it. Revisions to October and November jobs numbers showed a net gain of 19,000 jobs, though the three-month rolling average fell to 165,000, a drop of 11,000 from last month.
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