How the Labor Market Will Influence CRE Performance
Federal Reserve Preparing To Lower Interest Rates
- According to Wall Street, the Fed is anticipated to reduce interest rates by 25bps to 30 bps in September
- Downward jobs revision and rising unemployment leading the Fed to place more emphasis on supporting the labor market
Labor Market Is Cooling, But Not Signaling A Recession
- Rising unemployment reflects the slowdown of a previously-overheated labor market, rather than an economic downturn
- Labor market among middle-aged and college-educated population remains tight
- Despite revision, hiring still on par with pre-pandemic norms
Sustained Economic Growth Will Support CRE Space Demand
- Future rate cuts will help economy achieve a soft landing
- Wages climbing a steady pace, supporting retail sales growth that should flow into demand for retail and industrial spaces
- A healthy level of job growth will fuel household formations, bolstering consumer needs for apartments and self-storage
*T-12 through March after BLS 3Q revision; Revision applied to 2024
Sources: Marcus & Millichap Research Services, U.S. Census Bureau
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