Economy Watch: The Year Ends With a Surge in Employment
- Jan 08, 2016
The US economy created a fairly robust number of jobs in December, with total payroll employment up by a net 292,000, according to the Bureau of Labor Statistics on Friday. Several industries important to CRE enjoyed employment gains, including professional and business services, which is a good trend for office leasing and, ultimately, development. Construction, health care and food services and drinking places also hired more people.
For the entire year, in fact, employment in industries important to the health of commercial real estate recorded reasonably strong gains, though not quite as much as in 2014, mostly because of lagging numbers earlier last year. In 2015, for instance, professional and business services added 605,000 jobs, compared with a gain of 704,000 in 2014 (the gain in that industry sector was 73,000 in December).
Construction showed strong job growth for the third consecutive month, gaining 45,000 jobs in December, the bureau reported. Job gains were solid among specialty trade contractors (up 29,000) and in construction of buildings (up 10,000). For 2015, construction added 263,000 jobs, compared with a gain of 338,000 jobs in 2014.
As an exception to the trend, “mining” employment continued to decline in December. That category include oil and gas extraction, which lost 8,000 jobs in December, and 129,000 jobs in 2015, after gaining 41,000 in 2014. The drop is a function of declining energy prices, and in real estate terms has an impact on a handful of markets, the largest being Houston, which is seeing a slowdown in leasing. Most of the rest of the economy, and by extension the real estate industry, is benefiting from low energy prices.