Employers met expectations in February, adding 227,000 net new payroll jobs – the third consecutive monthly gain above 200,000. The previously reported numbers from December and January were revised upward by a combined 61,000. The labor market continues to expand at a moderately strong pace. Details of the report:
· Professional and business services added 82,000 followed by education and health services with 71,000. At the other extreme, the construction sector shed 13,000, and government lost 6,000, suggesting that the worst public sector cuts may be over.
· Average hourly earnings for all employees rose by 0.1 percent last month and by 1.9 percent over the past 12 months, failing to keep pace with the 2.9 percent gain in the consumer price index.
· The average workweek for all employees was unchanged at 34.5 hours.
· The unemployment rate remained steady at 8.3 percent. The number of respondents saying they had worked during the survey week increased by a robust 428,000, and the labor force increased by 476,000, a sign that discouraged workers are restarting their job searches.
This is welcome news for commercial real estate.
· The office-using sectors of professional and technical services, information, and finance together added 39,200 net new jobs last month. Using a ratio of 175 square feet per office employee, this rate of job creation, were it sustained, would generate absorption of around 82 million square feet of office space this year, although some of these workers would be accommodated in shadow space left over from corporate downsizing during the Great Recession. By comparison, the office market absorbed 27 million square feet last year.
· The sectors of the economy most important for the industrial market – namely manufacturing, wholesale trade, and transportation and warehousing – added a combined 50,000 net new jobs.
· Retailers sliced 7,400 positions last month, an anomaly related to seasonal adjustment factors and the warm winter. Over the prior three months, retailers added an average of 22,200 per month. pointing to steady leasing activity in shopping centers.
· The 44,000 net new jobs added in the leisure and hospitality sector signals that business is growing in the lodging industry.
Have a great weekend.
SVP, Chief Economist
Grubb & Ellis
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