The latest Bureau of Labor Statistics Employment Situation report for March 2012 with numbers that will do little to increase demand for office space. From August 2011 through February 2012 the monthly gains in payroll employment averaged slightly more than 200,000, with March numbers reflecting an increase of only 120,000 jobs according to a CoStar report.
"Employers spent a great deal of time and attention reducing costs over the past few years and apparently do not yet see enough solid evidence to sharply reverse course on hiring," said Ken Goldstein, economist at The Conference Board. "This could presage more disappointing job counts later this spring."
Kevin J. Thorpe, chief economist at Cassidy Turley, told CoStar that the numbers are "far from terrible" from an economic standpoint. "The job creation figures for both January and February were revised upwards by a total of 55,000," Thorpe said. "From December to March, employers have added 858,000 jobs. That is the best 4-month period of job creation since March of 2006. Remember that the single most important factor in determining the direction of the property markets is employment. All the key metrics - net absorption, vacancy, rents, cap rates, spreads - are statistically linked to fluctuations in jobs. In reality, even the strong employment reports prior to March had little impact in generating demand for office space."
"Both consumer products and transportation saw fewer job cuts in March after experiencing heavy cuts in February. These are key indicators of the economy's health, so they will be closely monitored in the coming months for more signs of distress. The hope is that the February surge in these sectors was not indicative of a trend," said John A. Challenger, CEO of Challenger, Gray & Christmas.
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